Small Firm Owner Characteristics and Primary Employment

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Halil Dincer Kaya


Our objective in this study is to examine the relation between small business owners’ characteristics and their tendency of having their business as their “primary employment”. In order to achieve that objective, we compare owner characteristics in high “primary employment” U.S. states versus in low “primary employment” states.  We use the “United States Small Business Friendliness Survey” done by Kauffman Foundation and in 2013. Our nonparametric tests show that in the states where relatively high percentage of owners have their business as “primary employment” (i.e. “high primary employment states”), owners run their business in a more professional way (i.e. relatively more owners hire managers to run their business). We also find that, in these states, owners have significantly more previous startup experience. In addition, we find that, in these states, there are fewer “Caucasian” owners and significantly more owners from other races. On the other hand, our findings show that there is no significant difference between owner’s gender, age, political view, and education across high and low primary employment states. We advise policymakers to use these findings when formulating policies that support entrepreneurship.

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