Black Women Are More Likely to Start a Business than White Men

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'...financial institutions could examine whether the criteria and procedures to invest or loan money are the same for all groups...'

, suggest that educated Black women are encumbered with debt, and have fewer personal resources and low collateral.

In addition, access to key resources needed for entrepreneurship are unevenly distributed in U.S. society, reinforcing the advantage of certain groups while impeding the entry and catching-up of disadvantaged groups. This only reinforces a cycle where resource limitations reduce one’s ability to generate financial gains from entrepreneurship.

Combating racial and gender disparities is a long-term proposition in the U.S., but there are immediate efforts that can help accelerate this change and provide near-term benefits. The finance community, for one, needs to look beyond aiding a disadvantaged group to recognizing both the biases they bring to investment assessment and the benefit of businesses run by educated Black women in sectors that can benefit from new ideas and social impact.

Our research also showed that Black women starting businesses in the U.S. are highly educated. Although slightly more thanin the general population have a college degree or higher level of education, we found that more than three-fourths of Black women entrepreneurs have at least a college degree.

Black women are positioned to play an increasingly visible and important role in the United States’ political and economic future, particularly with the election of the first Black woman vice president and the widespread call for change embodied in the Movement for Black Lives. Never before have we seen such potential for Black women to elevate their voice and their careers, and to achieve social and economic equality.

 

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