PDF: The Effect of Wealth and Race on Start-up Rates

The Effect of Wealth and Race on Start-up Rates

By Maritza Salazar (BCT Partners, LLC), 2007. 35 pages
Newark, NJ 07103 under contract no SBAHQ-05-M-0416

This paper, using the PSED, examines the role of net wealth in predicting whether a nascent entrepreneur will open his or her own business. Net wealth is found to increase the likelihood that a nascent entrepreneur will start a new company. The influence of wealth in predicting self-employment nearly doubles if the nascent entrepreneur is in the top 25 percent of the wealth distribution.


This research also demonstrates that net wealth affects the start-up rates of minority nascent entrepreneurs and white nascent entrepreneurs differently. These results show that wealth as a predictor of the likelihood that a nascent entrepreneur will open a business may be more complex than previously thought

>pdf of the report

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