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 coworking 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 onesided dependence, indeed increase co-working by partners and family. Monitoring problems influence co-working by partners, while onesided 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 coworking, although the direction of causality remains unclear for the effects of bankruptcy risks.
- trust problems
- transaction costs