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Title:The role of information and institutions in understanding the black-white gap in self-employment PDF Logo
Authors:Uwaifo Oyelere, Ruth
Belton, Willie
Issue Date:2008
Series/Report no.:IZA discussion papers 3761
Abstract:It has been well documented in the literature that ethnicity matters significantly in the determination of self-employment rates. In particular, African-American self-employment rates lag far behind rates for other racial groups. Similarly, the literature also provides evidence of the long lived nature of institutions and the link between institutions and decision making. After controlling for the appropriate factors that can lead to self-employment differentials, we provide an explanation for the self-employment gap that still exists between African-Americans and White Americans. We focus on the important role of repeated negative institutional shocks and how such shocks influence the development of an information matrix as well as the transmission of information across time and generations. We show that African-Americans who were less likely to be influenced by negative institutional shocks and the information stock created from these experiences, have similar self-employment rates to comparably situated White Americans.
Subjects:Self-employment
information
institutions
African-American
JEL:J15
Persistent Identifier of the first edition:urn:nbn:de:101:1-20081126162
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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