Minority Entrepreneurship and Access to Finance

We explore whether financial access explains persistent gender and racial imbalance in entrepreneurship. The 1979 NLSY overlaps with bank deregulation events between 1971 and 2001, permitting a difference in differences analysis of the propensity for young people to attempt entrepreneurship. We find that the movement away from local finance supported new entry by African American men into entrepreneurship, but not by women of any race. We show that financial access is an important determinant of the propensity of young adults to become entrepreneurs and provide new evidence about a mechanism through which the demographic gap in entrepreneurship might be closed