Inter-Generational Entrepreneurship?

As any entrepreneur (or entrepreneurship scholar) knows, the future is uncertain. This is why entrepreneurs, aiming to achieve ends in the unknown future, can make profits only under the “threat” of making losses. While this profit-and-loss system provides a framework for the self-regulating market process, one should not forget Ben Franklin’s statement that “in the world nothing can be said to be certain except death and taxes.”

Both of these “certain” phenomena are studied by two Uppsala University scholars, Marcus Eliason and Henry Ohlsson, who apply a data-driven approach to what may be called “inter-generational entrepreneurship.” Eliason and Ohlsson study the effects of repealing of the inheritance tax in Sweden and how that affected people’s timing of their own deaths. As astonishing as it is morbid, the researchers find a significant difference in the frequency of deaths before and after the repeal (controlling for other possible causes): married men and women were found to be 12% more likely to die on 1 January 2004 (after the repeal) than on 31 December 2003.

While more research is surely needed to identify the true causal relationships in this matter, for now it seems people on their death beds made sure to stick around a little longer — for financial reasons and for the sake of their loved ones. Judging from the results of this research, it seems that the country of Sweden, known for the world’s highest tax rates, shows the truthfulness of the statement that “love conquers all” — even post-death taxation. Maybe death and taxes are not as certain as Franklin would have us believe.

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One Response to Inter-Generational Entrepreneurship?

  1. Peter Klein says:

    I assume they control for cause of death — e.g., greedy heirs offing their rich parents.

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