This paper uses NCDS data on individual characteristics to distinguish dete
rminants of entrepreneurial choice, income and job generation. A new model
of utility from self-employment shows that relaxing liquidity constraints c
ould inhibit performance. Empirically, we find that a range of inheritance
enhances the performance of the self-employed and increases self-employment
; while higher education also increases self-employment income and job crea
tion, but reduces the probability of self-employment. Combining these choic
e and performance effects, we find that education has a positive net effect
on job creation, as does inheritance up to a certain threshold.