This paper examines the role of financial and human capital in the transition to self-employment, using data from the National Longitudinal Surveys (NLS). It investigates how parental wealth and human capital influence the likelihood of an individual transitioning from a wage and salary job to self-employment. The study finds that while financial assets have a statistically significant but small effect, parental human capital has a much larger influence. This effect is primarily through intergenerational correlations in self-employment, which are stronger along gender lines. The research highlights the importance of both financial and human capital in explaining the intergenerational transmission of self-employment. The findings suggest that policies aimed at enhancing human capital may be more effective in promoting self-employment than those focused solely on financial capital. The study also shows that parental self-employment experience significantly increases the likelihood of a son becoming self-employed, indicating that family background plays a crucial role in entrepreneurial success. The results emphasize the need to consider both financial and human capital when analyzing the transition to self-employment.This paper examines the role of financial and human capital in the transition to self-employment, using data from the National Longitudinal Surveys (NLS). It investigates how parental wealth and human capital influence the likelihood of an individual transitioning from a wage and salary job to self-employment. The study finds that while financial assets have a statistically significant but small effect, parental human capital has a much larger influence. This effect is primarily through intergenerational correlations in self-employment, which are stronger along gender lines. The research highlights the importance of both financial and human capital in explaining the intergenerational transmission of self-employment. The findings suggest that policies aimed at enhancing human capital may be more effective in promoting self-employment than those focused solely on financial capital. The study also shows that parental self-employment experience significantly increases the likelihood of a son becoming self-employed, indicating that family background plays a crucial role in entrepreneurial success. The results emphasize the need to consider both financial and human capital when analyzing the transition to self-employment.