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Race, Trust in Government, and Self-Employment

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  • Gregory N. Price

Abstract

This paper examines the effects of trust in government on the self-employment decision. For black Americans the decision to be self-employed, and the associated returns are likely to be particularly sensitive to trust in the federal government, as the history and political economy of race in the United States required federal government to introduce laws, legislation and institutions to alter the future behavior of whites in their market interactions with blacks. Utilizing General Social Survey Data, I find that among the self-employed, race—being black—is a negative determinant of various measures of trust and confidence in federal government. Parameter estimates from a Bivariate Probit estimator of the likelihood of black self-employment and income reveal that both increase with respect to several measures of trust and confidence in the federal government. The results suggest that as the relative growth and performance of black self-employment is trust and confidence sensitive, the underrepresentation of black-owned firms can possibly be explained by the relatively low trust and confidence in the federal government among black Americans.

Suggested Citation

  • Gregory N. Price, 2012. "Race, Trust in Government, and Self-Employment," The American Economist, Sage Publications, vol. 57(2), pages 171-187, November.
  • Handle: RePEc:sae:amerec:v:57:y:2012:i:2:p:171-187
    DOI: 10.1177/056943451205700203
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    File URL: https://journals.sagepub.com/doi/10.1177/056943451205700203
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    References listed on IDEAS

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    1. Samuel L. Myers & Tsze Chan, 1996. "Who benefits from minority business set-asides? The case of New Jersey," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(2), pages 202-226.
    2. Bogan, Vicki & Darity Jr., William, 2008. "Culture and entrepreneurship? African American and immigrant self-employment in the United States," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 1999-2019, October.
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    Cited by:

    1. Price, Gregory N., 2013. "The allometry of metabolism and stature: Worker fatigue and height in the Tanzanian labor market," Economics & Human Biology, Elsevier, vol. 11(4), pages 515-521.
    2. Gioacchino Fazio & Francesca Giambona & Erasmo Vassallo & Elli Vassiliadis, 2018. "A Measure of Trust: The Italian Regional Divide in a Latent Class Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 209-242, November.
    3. John E. Anderson, 2017. "Trust in Government and Willingness to Pay Taxes in Transition Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(1), pages 1-22, March.
    4. Dongxu Wu & Zhongmin Wu, 2015. "Intergenerational links, gender differences, and determinants of self-employment," Journal of Economic Studies, Emerald Group Publishing, vol. 42(3), pages 400-414, August.

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