Young Adults’ Race, Wealth, and Entrepreneurship

Abstract

This study explored relationships among young adults' wealth and entrepreneurial activities with emphasis on how these relationships differed among racial and ethnic groups. Using data from the 1997 National Longitudinal Survey of Youth, results indicated that young adults' (N = 8984) higher accumulated amounts of wealth were associated with pursuing self-employment at higher rates; however, differences emerged when the associations were explored with various types of wealth and within racial and ethnic groups. Black young adults' greater debt and net worth were associated with their increased likelihoods of self-employment. Among Latino/a young adults, greater liquid assets and net worth were associated with increased likelihoods of self-employment. Wealth was unrelated to white young adults' self-employment. Wealth appeared to play an outsized role in the self-employment of black and Latino/a young adults compared to that of their white counterparts. In other words, racial and ethnic minority young adults may have a heavier burden for generating their own capital to embark on entrepreneurial activities when mainstream credit markets are unresponsive or inaccessible. Policy implications are discussed.

Digital exposure, age, and entrepreneurship

“…Prior literature has addressed many factors influencing the likelihood of starting a new business. Horisch et al ( 2017 ) focus on occupational choice through the prism of gender, while Friedline and West ( 2016 ) focus on race. Lee and Vouchilas ( 2016 ) and Zhang and Acs ( 2018 ) highlight and contextualize the relationship between entrepreneurial activity and age, particularly of older workers.…”

Eight types of “baby boomer” entrepreneurs

“…Lévesque & Minniti, 2006). The identified factors driving entrepreneurial propensity include education (Velilla & Ortega, 2017), health (Zhang & Carr, 2014), unemployment rates (Fairlie & Fossen, 2017), prior (quasi-) entrepreneurial experience (Hsu, Shinnat, Powell, & Betty, 2017), wealth (Schmalz, Sraer, & Thesmar, 2017), age (Lee & Vouchilas, 2016), gender (Hörisch, Kollat, & Brieger, 2017), race (Friedline & West, 2016), urban residence (Glaeser, 2007), responsibility for family care (Walker, Grant, Meadows, & Cook, 2007), local economic settings (Fairlie & Fossen, 2017), and liquidity constraints (Schmalz et al., 2017). This study extends occupational choice models into choice among entrepreneurial types.…”