Income Instability: an Empirical Analysis.

Ph.D.EconomicsUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/157316/1/7425147.pd

The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment

Estimates from the Panel Study of Income Dynamics (PSID) indicate that African-American men are one-third as likely to be self-employed as white men.  The large discrepancy is due to a black transition rate into self-employment that is approximately one half the white rate and a black transition rate out of self-employment that is twice the white rate.  Using a new variation of the Blinder-Oaxaca decomposition technique, I find that racial differences in asset levels and probabilities of having self-employed fathers explain a large part of the black/white gap in the entry rate, but almost none of the gap in the exit rate