The “Myth” That Black Entrepreneurship Can Reduce the Gap in Wealth Between Black and White Families

Bradford, William D.

doi:10.1177/0891242414535468

Cited by 47 publications

(32 citation statements)

References 54 publications

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“…The negative early-stage impacts on minority-and immigrant-owned businesses, if prolonged, could be problematic for broader racial inequality because of the importance of small businesses for local job creation (disproportionately hiring other minorities), economic advancement, and longer-term wealth inequality (Boston, 1999(Boston, , 2006Bradford, 2003Bradford, , 2014Fairlie & Robb, 2008;Stoll, Raphael, & Holzer, 2001). With major losses in business activity in April and continued losses in May and June, even though these losses were smaller, business owners have already lost substantial amounts of income from their businesses.…”

Section: Importance Of Industry Distributionsmentioning

confidence: 99%

The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions

Fairlie

2020

Economics Manag Strategy

368

325

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Social-distancing restrictions and health-and economic-driven demand shifts from COVID-19 are expected to shutter many small businesses and entrepreneurial ventures, but there is very little early evidence on impacts. This paper provides the first analysis of impacts of the pandemic on the number of active small businesses in the United States using nationally representative data from the April 2020 Current Population Survey-the first month fully capturing early effects. The number of active business owners in the United States plummeted by 3.3 million or 22% over the crucial 2-month window from February to April 2020. The drop in active business owners was the largest on record, and losses to business activity were felt across nearly all industries. African-American businesses were hit especially hard experiencing a 41% drop in business activity. Latinx business owner activity fell by 32%, and Asian business owner activity dropped by 26%. Simulations indicate that industry compositions partly placed these groups at a higher risk of business activity losses. Immigrant business owners experienced substantial losses in business activity of 36%. Female business owners were also disproportionately affected (25% drop in business activity). Continuing the analysis in May and June, the number of active business owners remained low-down by 15% and 8%, respectively. The continued losses in May and June, and partial rebounds from April were felt across all demographic groups and most industries. These findings of early-stage losses to small business activity have important implications for policy, income losses, and future economic inequality. 1 | INTRODUCTION The widespread closing of stores and businesses in the United States and around the world due to the coronavirus is unprecedented. Stores, factories, and many other businesses have closed by policy mandate, downward demand shifts, health concerns, or other factors. Many of these closures may be permanent because of the inability of owners to pay ongoing expenses and survive the shutdown. The impact on small businesses around the world is likely to be severe. The early effects of COVID-19 on small business and entrepreneurs are not well known because of the lack of timely business-level data released by the government. This paper addresses this limitation by creating estimates of the number of business owners from monthly Current Population Survey (CPS) microdata files. Using these timely data,

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Section: Importance Of Industry Distributionsmentioning

confidence: 99%

The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions

Fairlie

2020

Economics Manag Strategy

368

325

View full text Add to dashboard Cite

show abstract

“…Immigrant businesses were also devastated with losses of 36 percent. The negative early-stage impacts on minority-and immigrant-owned businesses, if prolonged, may be problematic for broader racial inequality because of the importance of minority businesses for local job creation (disproportionately for other minorities), economic advancement, and longer-term wealth inequality (Boston 1999(Boston , 2006Bradford 2003Bradford , 2014Fairlie and Robb 2008).…”

Section: Importance Of Industry Distributionsmentioning

confidence: 99%

The Impact of Covid-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey

Fairlie¹

2020

191

103

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I have no disclosures to report. The research did not receive funding from external sources. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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“…The The negative early-stage impacts on minority-and immigrant-owned businesses, if prolonged, could be problematic for broader racial inequality because of the importance of small businesses for local job creation (disproportionately hiring other minorities), economic advancement, and longer-term wealth inequality (Boston 1999(Boston , 2006Stoll, Holzer and Raphael 2001;Bradford 2003Bradford , 2014Fairlie and Robb 2008). With major losses in business activity in April and continued losses in May and June, even though these losses were smaller, business owners have already lost substantial amounts of income from their businesses.…”

Section: Discussionmentioning

confidence: 99%

The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions

Fairlie

2020

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I would like to thank participants at the remote PPIC California labor market workshop and the remote Kauffman Foundation Entrepreneurship Issue Forum for comments and suggestions. The research project has also benefited from numerous conversations with the press and policymakers. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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The “Myth” That Black Entrepreneurship Can Reduce the Gap in Wealth Between Black and White Families

Cited by 47 publications

References 54 publications

The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions

The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions

The Impact of Covid-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey

The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions

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