The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment

45 Pages Posted: 13 Jan 2014

See all articles by Robert W. Fairlie

Robert W. Fairlie

University of California, Santa Cruz - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 12, 2014

Abstract

Estimates from the Panel Study of Income Dynamics (PSID) indicate that African-American men are one-third as likely to be entrepreneurs as white men. The large discrepancy is due to a black transition rate into self-employed business ownership that is approximately one half the white rate and a black transition rate out of self-employed business ownership that is twice the white rate. Using a new variation of the Blinder-Oaxaca decomposition technique, I find that racial differences in asset levels and probabilities of having self-employed fathers explain a large part of the black/white gap in the entry rate, but almost none of the gap in the exit rate.

Keywords: entrepreneurship, inequality, race, minorities, business ownership, labor

JEL Classification: L26, J15

Suggested Citation

Fairlie, Robert W., The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment (January 12, 2014). Available at SSRN: https://ssrn.com/abstract=2378091 or http://dx.doi.org/10.2139/ssrn.2378091

Robert W. Fairlie (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Department of Economics
Engineering 2 Bldg.
Santa Cruz, CA 95064
United States
831-459-3332 (Phone)

HOME PAGE: http://econ.ucsc.edu/~fairlie/

Register to save articles to
your library

Register

Paper statistics

Downloads
35
Abstract Views
1,142
PlumX Metrics