Entrepreneurship and Labor Absorption: Blacks and Whites in Northern U.S. Cities During the Great Depression

An extensive literature on newly developing societies shows that the urban economy's entrepreneurial sector can absorb a sizable share of persons who are unemployed and searching for work. Surprisingly, however, little research on the United States has examined entrepreneurship's labor abs...

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Bibliographic Details
Published inThe Review of Black political economy Vol. 49; no. 4; pp. 403 - 422
Main Author Boyd, Robert L.
Format Journal Article
LanguageEnglish
Published Los Angeles, CA SAGE Publications 01.12.2022
SAGE PUBLICATIONS, INC
Subjects
Absorption
Black owned businesses
Black people
Censuses
Deprivation
Developing countries
Economic depression
Entrepreneurs
Entrepreneurship
Great Depression
Labor market
LDCs
Mental depression
Ownership
Prospects
Racial inequality
Racism
Unemployed people
Unemployment
White people
United States > US
racial inequality
entrepreneurship
great depression
labor absorption
northern U.S. cities
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Summary:An extensive literature on newly developing societies shows that the urban economy's entrepreneurial sector can absorb a sizable share of persons who are unemployed and searching for work. Surprisingly, however, little research on the United States has examined entrepreneurship's labor absorption capacity. The present study fills this gap by analyzing Blacks and Whites in northern U.S. cities during the Great Depression, a time of widespread joblessness, particularly among Blacks. The results suggest that, if not for Blacks’ uniquely severe resource deprivation, Black entrepreneurship could have absorbed a large number of jobless Blacks. Labor absorption estimates, calculated with 1940 Census data, indicate that one-third of the Black-White unemployment difference is attributable to racial inequality of entrepreneurial outcomes. This historical evidence advances social-scientific understanding of racial inequality during the Great Depression and informs a longstanding debate about the merits of promoting Black business ownership as a strategy for improving Blacks’ labor market prospects.
ISSN:0034-6446
1936-4814
DOI:10.1177/00346446211060543