An Anatomy of Entrepreneurial Pursuits in Relation to Poverty
Entrepreneurship and Regional Development, Forthcoming
41 Pages Posted: 28 May 2019 Last revised: 29 May 2019
Date Written: April 1, 2019
This study examines the causal relationships between inequality, poverty, and entrepreneurship. We hypothesize that income inequality influences entrepreneurial activity, and entrepreneurial activity alleviates absolute poverty. Findings from a longitudinal analyses of a dataset from all 50 U.S. states over an 18-year period provide robust support for these hypotheses. Furthermore, the results suggest that antipoverty public policy aimed at encouraging work (i.e. Earned income tax credit, EITC) can be detrimental to entrepreneurial activity. These findings underscore the importance of linking public policy efforts aimed at poverty alleviation with those aimed at encouraging additional entrepreneurship.
Keywords: Entrepreneurial activity, income inequality, opportunity, poverty, public policy, development
JEL Classification: I30, L26, L31
Suggested Citation: Suggested Citation