Publication Type
Journal Article
Version
publishedVersion
Publication Date
5-2017
Abstract
We examine the causal effect of neighborhood segregation on black entrepreneurship. We address neighborhood sorting by analyzing city averages and omitted variable bias by instrumenting for segregation using historical railroad configurations. We find that segregation has a significant positive effect: a 10 percentage point increase in the dissimilarity index decreases the racial gap by about 3.3 percentage points. To minimize the effect of cross-city sorting, we use a narrower sample constructed from outcomes of young adults and find a similar effect. Our findings are importantbecause historically, entrepreneurship has been an avenue out of poverty, and entrepreneurship has been promoted as a way to decrease welfare and unemployment. (C) 2017 Elsevier B.V. All rights reserved.
Keywords
Segregation, Inequality, Entrepreneurship, Self-employment
Discipline
Entrepreneurial and Small Business Operations | Race and Ethnicity
Research Areas
Applied Microeconomics
Publication
Economics Letters
Volume
154
First Page
88
Last Page
91
ISSN
0165-1765
Identifier
10.1016/j.econlet.2017.02.025
Publisher
Elsevier
Citation
FESSELMEYER, Eric and SEAH, Kiat Ying.
Neighborhood segregation and black entrepreneurship. (2017). Economics Letters. 154, 88-91.
Available at: https://ink.library.smu.edu.sg/cis_research_all/5
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://doi.org/10.1016/j.econlet.2017.02.025