Impact of college education on incorporated and unincorporated self-employment: variations among African Americans and Hispanics

Abstract

PurposeThis study examines the impact of college education on incorporated and unincorporated self-employments. It specifically compares the effects on African Americans and Hispanics with the effects on Whites.Design/methodology/approachThe study sample was drawn from the US Current Population Survey between 1989 and 2018. Based on a sample size of 1,657,043 individuals, this study employed logit regression models to test the hypotheses. Racial variations were examined using African Americans and Hispanics as moderators.FindingsThe results suggest that college education increases incorporated self-employment and reduces unincorporated self-employment. The impact of college education on incorporated self-employment is stronger for African Americans and Hispanics than for Whites. In contrast, its effect on unincorporated self-employment is stronger for Whites than for African Americans and Hispanics.Research limitations/implicationsThe findings provide empirical evidence of how college experience changes the motivation of starting an incorporated or unincorporated business. The results suggest that college education impacts African Americans and Hispanics differently than Whites in pursuing their career path of entrepreneurship.Originality/valueIt is the first study that examines the relationship between college education and incorporated/unincorporated self-employment. It also sheds light on radical variations.