Nascent Entrepreneurship and Race: Evidence from the GATE Experiment

We examine white-black disparities in the labor market outcomes of nascent entrepreneurs using data from Project GATE, an experimental-design entrepreneurship training program. Findings show that white nascent entrepreneurs who applied for the program were more successful than their black peers in starting a business, becoming self-employed, and achieving high earnings. These disparities were largely because whites were more likely to have access to start-up financing and – to a lesser extent – because whites had more human capital and business background. The program was found effective in helping both white and black nascent entrepreneurs to start a business and become self-employed, but there is limited evidence that it reduced white-black entrepreneurship gaps.