Economic Opportunity and Growth
Most Research on Entrepreneurs Looks at Elites
Entrepreneurship research has long shaped how we understand innovation, economic growth, and social mobility—but who gets studied, and who gets left out? In Research in Organizational Behavior, entrepreneurship scholar and IPR associate Kylie Hwang and co-author Damon Phillips show that top management journals have overwhelmingly focused on elite entrepreneurs—those who are wealthy, highly educated, and well-connected—while largely neglecting those from marginalized backgrounds. They contend that this bias limits both the accuracy and applicability of entrepreneurship theories. Hwang and Phillips highlight how existing research disproportionately examines founders with access to stable, high-paying jobs, elite networks, and venture capital, overlooking entrepreneurs who start businesses out of necessity or due to barriers in traditional employment. They argue that this narrow lens has led scholars to develop theories that may not hold for the majority of entrepreneurs, particularly those from marginalized groups such as individuals with disabilities, low-income backgrounds, or past incarceration experience. By expanding research to include a broader range of entrepreneurial experiences—including small businesses, self-employment, and hybrid work models—Hwang and Phillips call for a shift in focus that can lead to more comprehensive theories and policies. Integrating the experiences of marginalized entrepreneurs, they argue, is not just a matter of representation—it is essential for understanding the true landscape of entrepreneurship and its potential to drive social and economic change.
Perceptions of a Living Wage
How much money is enough to live on is fundamental to many basic life decisions. In a working paper, IPR adjunct professor Michael Kraus and his colleagues examine how people estimate a living wage, how income shapes their estimates, and how it influences their support for government policies. The researchers asked 1,000 adults across the United States several questions, including what they think is a living wage, the average wage of working adults, and the average wage of workers earning the minimum wage. The participants also reported what they consider to be a basic need, their monthly spending, and their support for redistributive policies. The researchers find that people’s estimates of a living wage are higher than the federal poverty line, the state and federal minimum wage, a popular cost of living calculator called the MIT living wage calculator, and the proposed minimum wage standard of $15 per hour. Participants who reported higher estimates of a living wage were more likely to support redistributive policies, such as expanding programs that improve the living standards of disadvantaged groups or creating a federal job guarantee program. The results show that people generally report a living wage as higher than the federal standard and their beliefs about economic conditions are shaped by their own socioeconomic experiences. Future research should continue to explore income’s influence on perceptions of a living wage and how people calculate leisure as part of a living wage, given its importance for wellbeing.
Disrupting Beliefs in Racial Economic Progress
Despite limited progress, stark wealth inequality still exists between Black and White Americans, and many Americans are unaware of the size of the gap. In Personality and Social Psychology Bulletin, management professor and IPR associate Ivuoma Onyeador, IPR faculty adjunct Jennifer Richeson, and their colleagues examine whether information about racism’s impact on opportunities and outcomes for racial minorities improves White Americans’ perceptions of the current Black-White wealth gap. In one study, 667 White participants read an article about racial inequality in the U.S. or another article and then provided their estimates
of income and wealth equality between Black and White Americans in 1963 and 2016. In a second study, 845 White participants were randomly assigned to read one of two articles about the persistence of racial discrimination because of either explicit bias or implicit bias, or they did not read anything. Both studies found that reading about racism and either implicit or explicit discrimination produced smaller overestimates of how much the wealth gap had narrowed over time, but largely because participants adjusted their estimates of past levels of racial economic equality down. The findings indicate that, while White Americans’ belief in racial progress may be disrupted temporarily, their belief in the equality of Black and White Americans’ current economic circumstances is misinformed. Future research is needed to uncover interventions that could help provide accurate information about current economic gaps.
Immigration and Entrepreneurship in the U.S.
Immigration can expand labor supply and create greater competition for native-born workers, but immigrants also start businesses and increase the demand for labor. In an IPR working paper, strategy professor and IPR associate Benjamin Jones and his colleagues study the role of immigrants in entrepreneurship. Using U.S. Census Bureau data and population-wide W-2 tax records, they integrated employment and demographic records to see whether founders of companies between 2005 and 2010 were native- or foreign-born. To determine the immigrant status of the founders and the size of the companies, the researchers also examined the U.S. Census’s Survey of Business Owners in 2012, and they collected data on firms listed in the 2017 Fortune 500 ranking. The researchers find across the data that immigrants start companies of every size at higher rates than native-born individuals. Overall, the results show immigrants are highly entrepreneurial. Jones and his colleagues suggest that immigrants act more as "job creators" than "job takers." These findings can help resolve the tension between labor supply-oriented analyses, where immigrants are seen to compete with local workers and depress wages, and natural experiments that often show more positive economic results of immigration for native born workers. Jones is the Gordon and Llura Gund Family Professor of Entrepreneurship.