Homo Entreprenaurus?

This paper examines the determinants of self-employment and transitions from wage work to self-employment using two sets of Finnish data from the 1990?s. The results show that capital constraints have only a minor effect on new business starts. Human capital, in the form of intergenerational links in self-employment and psychological factors play a much larger role. The paper also provides empirical evidence that less risk-aversive workers are more likely to become entrepreneurs.