Abstract
This paper investigates how human capital, liquidity, and family and demographic factors contribute to self-employment. A simple mathematical model is built up for analysis and the logit regression is used as econometric method. After analyzing 1999 data of Panel Study of Family Dynamics (PSFD) we find human capital and family factors contribute to self-employment more than financial liquidity. More specifically, we find that male with average education is more likely to become self-employed.