Skin Tone and Self-Employment: Is there an Intra-Group Variation among Blacks?

Abstract

The purpose of this paper is to formally evaluate whether odds of entry into self-employment decrease as skin tone darkens for Blacks in the United States. Extending past work on inter-group differences in Black-White self-employment, based on data from National Longitudinal Survey of Youth 1997, with darker skin tone the odds of self-employment decline. Having spent more time in labor force further decreases the likelihood of self-employment for darker skin tone Blacks, and being a high-school graduate, scoring high on Armed Services Vocational Aptitude Battery (ASVAB), or higher past year income are not associated with self-employment of darker skin tone Blacks. While darker skin tone Blacks who are self-employed derive lower income, those who are self-employed and with more human capital (longer time spent in the labor force, scoring high on ASVAB or being a high school graduate) have a higher income.