Do Attitudes toward Risk Taking Affect Entrepreneurship? Evidence from Second-Generation Americans

This paper empirically investigates the impact of willingness to take risks on the likelihood of being an entrepreneur. We use a quarter-century of data on second-generation Americans from Current Population Surveys in conjunction with country-level measures of willingness to take risks from the Global Preference Survey. The average level of risk taking in the country of origin is found to have a positive and significant impact on the likelihood of being an entrepreneur. A one-standard deviation increase in risk taking increases the probability of being an entrepreneur by 15 percent. We also examine other preferences and cultural measures including trust, patience, and individualism. We find that these do not have an impact on entrepreneurship, while risk taking continues to be significant