Journal of Finance and Economics, 2017, Issue 10

Authors: Chen Hao, Lyu Yue

Abstract: This paper investigates the effects of official families on their children entrepreneurship, and further analyzes its internal mechanism based on the data of Chinese General Social Survey, It comes to the following conclusions: firstly, the official families significantly restrain entrepreneurial behavior of their children, and reduce the probability of occurrence of entrepreneurship; secondly, education screening mechanism is suitable for explaining the phenomenon of curbs on children entrepreneurship in official families,  namely the children from official families generally have longer educational life, and thus do not tend to be more likely to choose riskier entrepreneurial jobs; thirdly, the curbs on entrepreneurship in official families come mainly from fathers as the officials, and mothers as the officials do not have significant effects on children entrepreneurship. In addition, it further identifies two possible mechanisms of curbs on entrepreneurship possibly coexisting with education screening. Although official families similarly restrain children entrepreneurship owing to avoiding arousing suspicions, education screening is still the most important realistic mechanism. Robust classification test supports the above conclusions and concludes the policy ideas for encouraging entrepreneurship and ensuring equitable employment.

Key words: official family; children entrepreneurship; education screening; mediating effect; rare event deviation