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Easier to Start, Harder to Succeed: Barriers to Black Entrepreneurship since the Great Recession

Author

Listed:
  • Pedro Bento
  • Sunju Hwang

Abstract

We use a structural framework to interpret trends related to Black entrepreneurship, and infer how race-specific barriers faced by Black entrepreneurs have changed since the Great Recession. While all barriers declined consistently before the Recession, we find only the cost of starting a firm has declined since, relative to the cost faced by non-Black entrepreneurs. Since the Recession, Black entrepreneurs have experienced sharply increasing costs of employing labor and capital, and declining demand relative to other entrepreneurs. As a result, convergence in entrepreneurship rates has stalled.

Suggested Citation

  • Pedro Bento & Sunju Hwang, 2022. "Easier to Start, Harder to Succeed: Barriers to Black Entrepreneurship since the Great Recession," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 292-295, May.
    • Handle: RePEc:aea:apandp:v:112:y:2022:p:292-95
    DOI: 10.1257/pandp.20221029
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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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