The Wealth Dynamics of Entrepreneurship for Black and White Families in the U.S.

Abstract

Among black and white families, entrepreneurs hold disproportionately more wealth than workers. Black entrepreneurs hold a lower fraction of black family wealth than white entrepreneurs hold of white family wealth, because black families have a lower rate of entrepreneurship. Black and white entrepreneurs have more upward and less downward mobility in the wealth distribution than black and white workers, respectively. The black entrepreneurs and white entrepreneurs have similar upward mobility and black entrepreneurs less downward mobility in the wealth distribution. The entrepreneurs save at higher rates than workers, and the saving rates of black entrepreneurs and white entrepreneurs are not found to differ.