Papers Containing Tag(s): 'Russell Sage Foundation'
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Authors
Alicia Robb - 5
Robert Fairlie - 5
Viewing papers 21 through 30 of 30
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Working PaperGender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey
December 2008
Working Paper Number:
CES-08-39
Using confidential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and financial capital play in contributing to why female-owned businesses have lower survival rates, profits, employment and sales. We find that female-owned businesses are less successful than male-owned businesses because they have less startup capital, and business human capital acquired through prior work experience in a similar business and prior work experience in family business. We also find some evidence that femaleowned businesses work fewer hours and may have different preferences for the goals of their business.View Full Paper PDF
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Working PaperSpatial Mismatch or Racial Mismatch?
June 2007
Working Paper Number:
CES-07-16
We contrast the spatial mismatch hypothesis with what we term the racial mismatch hypothesis - that the problem is not a lack of jobs, per se, where blacks live, but a lack of jobs into which blacks are hired, whether because of discrimination or labor market networks in which race matters. We first report new evidence on the spatial mismatch hypothesis, using data from Census Long-Form respondents. We construct direct measures of the presence of jobs in detailed geographic areas, and find that these job density measures are related to employment of black male residents in ways that would be predicted by the spatial mismatch hypothesis - in particular that spatial mismatch is primarily an issue for low-skilled black male workers. We then look at racial mismatch, by estimating the effects of job density measures that are disaggregated by race. We find that it is primarily black job density that influences black male employment, whereas white job density has little if any influence on their employment. This evidence implies that space alone plays a relatively minor role in low black male employment rates.View Full Paper PDF
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Working PaperAccess to Financial Capital Among U.S. Businesses: The Case of African-American Firms
December 2006
Working Paper Number:
CES-06-33
The differences between African-American business ownership rates and white business ownership rates are striking. Estimates from the 2000 Census indicate that 11.8 percent of white workers are self-employed business owners, compared with only 4.8 percent of black workers. Furthermore, black-white differences in business ownership rates have remained roughly constant over most of the twentieth century (Fairlie and Meyer 2000). In addition to lower rates of business ownership, black-owned businesses are less successful on average than are white or Asian firms. In particular, black-owned businesses have lower sales, hire fewer employees and have smaller payrolls than white- or Asian-owned businesses, on average (U.S. Census Bureau 2001, U.S. Small Business Administration 2001). Black firms also have lower profits and higher closure rates than white firms (U.S. Census Bureau 1997, U.S. Small Business Administration 1999). For most outcomes, the disparities are extremely large. For example, estimates from the 2002 Survey of Business Owners (SBO) indicate that white firms have average sales of $437,870 compared with only $74,018 for black firms.View Full Paper PDF
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Working PaperDeterminants of Business Success: An Examination of Asian-Owned Businesses in the United States
December 2006
Working Paper Number:
CES-06-32
Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons . Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.View Full Paper PDF
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Working PaperFamilies, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey
June 2005
Working Paper Number:
CES-05-07
An important finding in the rapidly growing literature on self-employment is that the probability of self-employment is substantially higher among the children of business owners than among the children of non-business owners. Using data from the confidential and restricted-access Characteristics of Business Owners (CBO) Survey, we provide some suggestive evidence on the causes of intergenerational links in business ownership and the related issue of how having a family business background affects small business outcomes. Estimates from the CBO indicate that more than half of all business owners had a self-employed family member prior to starting their business. Conditional on having a self-employed family member, less than 50 percent of small business owners worked in that family member's business suggesting that it is unlikely that intergenerational links in self-employment are solely due to the acquisition of general and specific business capital and that instead similarities across family members in entrepreneurial preferences may explain part of the relationship. In contrast, estimates from regression models conditioning on business ownership indicate that having a self-employed family member plays only a minor role in determining small business outcomes, whereas the business human capital acquired from prior work experience in a family member's business appears to be very important for business success. Estimates from the CBO also indicate that only 1.6 percent of all small businesses are inherited suggesting that the role of business inheritances in determining intergenerational links in self-employment is limited at best.View Full Paper PDF
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Working PaperWhy Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital
June 2005
Working Paper Number:
CES-05-06
Four decades ago, Nathan Glazer and Daniel Patrick Moynihan made the argument that the black family "was not strong enough to create those extended clans that elsewhere were most helpful for businessmen and professionals." Using data from the confidential and restricted access Characteristics of Business Owners Survey, we investigate this hypothesis by examining whether racial differences in family business backgrounds can explain why black-owned businesses lag substantially behind white-owned businesses in sales, profits, employment size and survival probabilities? Estimates from the CBO indicate that black business owners have a relatively disadvantaged family business background compared with white business owners. Black business owners are much less likely than white business owners to have had a self-employed family member owner prior to starting their business and are less likely to have worked in that family member's business. We do not, however, find sizeable racial differences in inheritances of business. Using a nonlinear decomposition technique, we find that the relatively low probability of having a self-employed family member prior to business startup among blacks does not generally contribute to racial differences in small business outcomes. Instead, the lack of prior work experience in a family business among black business owners, perhaps by limiting their acquisition of general and specific business human capital, negatively affects black business outcomes. We also find that limited opportunities for acquiring specific business human capital through work experience in businesses providing similar goods and services contribute to worse business outcomes among blacks. We compare these estimates to contributions from racial differences in owner's education, startup capital, geographical location and other factors.View Full Paper PDF
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Working PaperWorker Advancement in the Low-Wage Labor Market: The Importance of Good Jobs
July 2003
Working Paper Number:
tp-2003-08
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Working PaperUnlocking the Information in Integrated Social Data
May 2002
Working Paper Number:
tp-2002-21
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Working PaperRedistribution in the Current U.S. Social Security System
April 2002
Working Paper Number:
CES-02-09
Because its benefit formula replaces a greater fraction of the lifetime earnings of lower earners than of higher earnings, Social Security is generally thought to be progressive, providing a 'better deal' to low earners in a cohort than to high earners. However, much of the intra-cohort redistribution in the U.S. Social Security system is related to factors other than lifetime income. Social Security transfers income from people with low life expectancies to people with high life expectancies, from single workers and from married couples with substantial earnings by the secondary earner to married one-earner couples, and from people who work for more than 35 years to those who concentrate their earnings in 35 or fewer years. This paper studies the redistribution accomplished in the retirement portion of the current U.S. Social Security system using a microsimulation model built around a match of the 1990 and 1991 Surveys of Income and Program Participation to Social Security administrative earnings and benefit records. The model simulates the distribution of internal rates of returns, net transfers, and lifetime net tax rates from Social Security that would have been received by members of the 1925 to 1929 birth cohorts if they had lived under current Social Security rules for their entire lives. The paper finds that annual income-related transfers from Social Security are only 5 to 9 percent of Social Security benefits paid, or $19 to $34 billion, at 2001 aggregate benefits levels, when taxes and benefits are discounted at the cohort rate of return of 1.29 percent. At higher discount rates, Social Security appears to be more redistributive by some measures, and less redistributive by others. Because much of the redistribution that occurs through Social Security is not related to income, the range of transfers received at a given level of lifetime income is quite wide. For example, 19 percent of individuals in the top lifetime income quintile receive net transfers that are greater than the average transfer for people in the lowest lifetime income quintile.View Full Paper PDF
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Working PaperThe Distributional Effects of an Investment-Based Social Security System
April 2002
Working Paper Number:
CES-02-08
In this paper we study the distributional impact of a change from the existing pay-as-you-go Social Security system to one that combines both pay-as-you-go and investment-based elements. Such a transition can avert the large tax increases that would otherwise be necessary to maintain the level of benefits promised under current law as life expectancy increases. According to the Social Security actuaries (Board of Trustees, 1999), retaining the existing pay-as-you-go system would eventually require raising the current 12.4 percent Social Security payroll tax rate to about 19 percent to maintain the current benefit rules or cutting benefits by more than one-third in order to avoid a tax increase. In contrast, previous research showed that adding an investment-based component with savings equal to two percent of covered earnings to the existing 12.4 percent pay-as-you-go system would be sufficient to maintain the benefits promised under current rules without any increase in tax rates (Feldstein and Samwick 1997, 1998a, 1998b).View Full Paper PDF
