A family affair - Explaining co-working by family members

This study focuses on co-working by intimate partners and other family members in entrepreneurs' businesses. We hypothesize that co-working by family is beneficial because it reduces trust problems associated with employment relations. On the other hand, co-working is risky because co-working family members may lose income from, and their investments in, the business in the case of bankruptcy or, specific to co-working partners, in the case of separation. Using data from the survey Households in the Netherlands 1995 (N = 137 entrepreneurs), we find that more trust problems, indicated by monitoring problems and one-sided dependence, indeed increase co-working by partners and family. Monitoring problems influence co-working by partners, while one-sided dependence influences co-working by family members. We also find that married partners are more likely to co-work than cohabiting partners. Bankruptcy risks are associated with the likelihood of co-working, although the direction of causality remains unclear for the effects of bankruptcy risks.