Early-life Family Disruption and Entrepreneurship

Entrepreneurial activity is not only shaped by entrepreneurs’ current family relationships but also by their past relationships with their parents dating back to their childhood. Drawing on life course theory, we theorize that disruptions in childhood family structures in the form of parental divorce affect entrepreneurial entry and performance in adulthood by altering children’s social and educational pathways. Using data from the United States from the 1979-2018 waves of the National Longitudinal Survey of Youth (NLSY79), we find that having experienced parental divorce in childhood increases the odds of entrepreneurial entry in adulthood, and that the impact of parental divorce on entrepreneurial performance is contingent upon parents’ socio-economic status.