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Entrepreneurship and Earnings among Young Adults from Disadvantaged Families

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  • Robert Fairlie

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Abstract

Academicians and policymakers have argued that entrepreneurship provides a route out of poverty and an alternative to unemployment or discrimination in the labor market. Existing research, however, provides little evidence from longitudinal data on the relationship between business ownership and economic advancement for disadvantaged groups. I use data from the National Longitudinal Survey of Youth (NLSY) to examine the earnings of young business owners from disadvantaged families and make comparisons to young wage/salary workers from disadvantaged families. For young men from disadvantaged families, I find some evidence that self-employed business owners earn more than wage/salary workers. In contrast, I find that for young women from disadvantaged families business owners earn less than wage/salary workers. The results from these earnings comparisons are somewhat sensitive to the use of different measures of income and econometric models. Copyright Springer 2005

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 25 (2005)
Issue (Month): 3 (October)
Pages: 223-236

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Handle: RePEc:kap:sbusec:v:25:y:2005:i:3:p:223-236

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Web page: http://www.springerlink.com/link.asp?id=100338

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Keywords: entre preneurship; business owners; disadvantaged;

References

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  1. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
  2. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "Sticking it Out: Entrepreneurial Survival and Liquidity Constraints," NBER Working Papers 4494, National Bureau of Economic Research, Inc.
  3. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
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Citations

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Cited by:
  1. Mirjam Praag & Arjen van Witteloostuijn & Justin van der Sluis, 2013. "The higher returns to formal education for entrepreneurs versus employees," Small Business Economics, Springer, vol. 40(2), pages 375-396, February.
  2. Magnus Lofstrom, 2011. "Low-skilled immigrant entrepreneurship," Review of Economics of the Household, Springer, vol. 9(1), pages 25-44, March.
  3. Ruth Oyelere & Willie Belton, 2013. "Black–White gap in self-employment. Does intra-race heterogeneity exist?," Small Business Economics, Springer, vol. 41(1), pages 25-39, June.
  4. C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Jena Economic Research Papers 2007-061, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  5. Caliendo, Marco & Kritikos, Alexander S., 2007. "Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects," IZA Discussion Papers 3220, Institute for the Study of Labor (IZA).
  6. Joanna Tyrowicz & Joanna Nestorowicz, 2010. "Cynicism Starts Young: Age and Entrepreneurship over Transition," Working Papers 2010-02, Faculty of Economic Sciences, University of Warsaw.
  7. M. Thomas, 2009. "The impact of education histories on the decision to become self-employed: a study of young, aspiring, minority business owners," Small Business Economics, Springer, vol. 33(4), pages 455-466, December.
  8. repec:dgr:uvatin:2009111 is not listed on IDEAS
  9. Thor Olav Thoresen, 2009. "Income Mobility of Owners of Small Businesses when Boundaries between Occupations are Vague," CESifo Working Paper Series 2633, CESifo Group Munich.
  10. Eddy Tukamushaba & Laura Orobia & Babu George, 2011. "Development of a conceptual model to understand international social entrepreneurship and its application in the Ugandan context," Journal of International Entrepreneurship, Springer, vol. 9(4), pages 282-298, December.
  11. Magnus Lofstrom, 2013. "Does self-employment increase the economic well-being of low-skilled workers?," Small Business Economics, Springer, vol. 40(4), pages 933-952, May.

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