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

Does business ownership reduce the wealth disparity between Black and White households? The author uses Panel Study of Income Dynamics (PSID) data on family wealth in 1999 through 2009 to examine the levels of wealth and changes in wealth of entrepreneurs and workers among Black and White families. Black entrepreneurs (self-employed) have higher wealth levels and more upward wealth mobility than do Black workers. The upward wealth mobility of Black entrepreneurs is equivalent to that of White entrepreneurs, while the wealth mobility of White entrepreneurs is greater than that of White workers. These findings are consistent with Black entrepreneurship reducing the wealth disparity between Black and White families.