Changes in family health represent pervasive and disruptive life events (Cooper & Marshall, 1976), but are generally taken for granted in entrepreneurship research. Households and their firms in developing contexts are particularly susceptible to health risks (Rai & Ravi, 2011) due to poor sanitary conditions and weak health-related institutions (Banerjee & Duflo, 2009). The business risks of health changes are exacerbated due to deeply embedded relationships and fluid boundaries between family and business in developing environments (cf. Aldrich & Cliff, 2003; Gras & Nason, 2014.

We draw on transition theory (Bridges, 2004; Van Gannep, 1960) to develop and test a theory of the role of family household health in impoverished entrepreneurial activity. Specifically, we suggest that households create, close, and grow firms to cope with the family household health events of birth, death and major illness/injury.