The aim of this article is to analyse how the decision to become self-employed as an adult is influenced by the neighbourhood characteristics experienced during adolescence. The focus is on individuals of foreign background since this is a group that shows low employment rates compared with native Swedes at the same time as the geographic and social separation between individuals of different backgrounds is increasing. The results show that while the short-term effects of segregation on self-employment are negative, individuals who grow up in ethnically segregated neighbourhoods are more likely to become self-employed later in life. In addition, both growing up with and residing with entrepreneurial neighbours have a positive effect on self-employment. Hence, the ethnic and social capital collected during youth seems to persist through adulthood.
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