Educational Attainment: A Key Factor for Improving the Lagging Rate of Black Entrepreneurship

The difference between the percentage of blacks and whites who are self-employed in the United States is striking. In this paper, we focus on the role of educational achievement in explaining the gap between white and black entrepreneurship. Using data collected through the Panel Study of Entrepreneurial Dynamics (PSED), we identified 1.061 white nascent entrepreneurs (NEs) and 270 black NEs and compared the two groups against each other as well as to white and black comparison groups of non-NEs. The results suggest that in order to improve the rate of black entrepreneurship, more focus is needed on improving black educational achievement.