5/20/2010 9:00:00 AM By
E.J. Reedy
Today we released the
2009 Kauffman Index of Entrepreneurial Activity. This piece is important because it is the earliest indicator we have of how the composition of who is becoming an entrepreneur is changing. Given the recession, the 2009 numbers are particularly of interest. As a quick background, the Kauffman Index measures entrepreneurship as the percentage of the adult, non-business owner population that starts a business each month, thus the Kauffman Index captures all new business owners, including those who own incorporated or unincorporated businesses, and those who are employers or non-employers.
You can find more of an overview of the findings on the
main Kauffman website, but 2009 is notable in that it does show the highest index rating for the U.S. generally, African-Americans, and men. But rather than regurgitate what we have released there, I wanted to post a few additional tables that I found very interesting showing the composition changes over time of who is becoming an entrepreneur. So here Rob Fairlie (the study's author) and I have applied the Kauffman Index rates of entry for the different demographic groups to the Current Population Surveys weights for these populations over time. This isn't information we focus on in the current report but I do think we might add it in next year as we only really went down this route in the last few days.
Composition of New Entrepreneurs by Age
| |
Ages 20-34 |
Ages 35-44 |
Ages 45-54 |
Ages 55-64 |
| 1996 |
35% |
27% |
24% |
14% |
| 1997 |
35% |
28% |
21% |
16% |
| 1998 |
34% |
29% |
21% |
16% |
| 1999 |
33% |
30% |
22% |
16% |
| 2000 |
29% |
27% |
26% |
18% |
| 2001 |
30% |
27% |
25% |
18% |
| 2002 |
29% |
28% |
26% |
17% |
| 2003 |
26% |
30% |
25% |
19% |
| 2004 |
30% |
26% |
24% |
21% |
| 2005 |
31% |
25% |
23% |
20% |
| 2006 |
28% |
25% |
27% |
20% |
| 2007 |
28% |
26% |
27% |
19% |
| 2008 |
28% |
25% |
26% |
21% |
| 2009 |
25% |
27% |
26% |
23% |
Composition of New Entrepreneurs by Race
| |
White |
Black |
Latino |
Asian |
| 1996 |
77% |
9% |
11% |
4% |
| 1997 |
77% |
9% |
11% |
3% |
| 1998 |
78% |
8% |
11% |
4% |
| 1999 |
75% |
10% |
11% |
4% |
| 2000 |
74% |
11% |
12% |
3% |
| 2001 |
73% |
10% |
13% |
5% |
| 2002 |
73% |
11% |
12% |
4% |
| 2003 |
70% |
9% |
16% |
5% |
| 2004 |
72% |
9% |
15% |
5% |
| 2005 |
71% |
10% |
14% |
5% |
| 2006 |
70% |
10% |
15% |
5% |
| 2007 |
67% |
9% |
18% |
5% |
| 2008 |
65% |
8% |
21% |
6% |
| 2009 |
66% |
10% |
19% |
5% |
Composition of New Entrepreneurs by Nativity
| |
Native-Born |
Immigrant |
| 1996 |
86% |
14% |
| 1997 |
87% |
13% |
| 1998 |
86% |
14% |
| 1999 |
85% |
15% |
| 2000 |
84% |
16% |
| 2001 |
84% |
16% |
| 2002 |
82% |
18% |
| 2003 |
81% |
19% |
| 2004 |
79% |
21% |
| 2005 |
82% |
18% |
| 2006 |
80% |
20% |
| 2007 |
76% |
24% |
| 2008 |
74% |
26% |
| 2009 |
76% |
24% |
Composition of New Entrepreneurs by Education Level
| |
Less than High School |
High School Graduate |
Some College |
College Graduate |
| 1996 |
17% |
33% |
27% |
23% |
| 1997 |
17% |
31% |
28% |
24% |
| 1998 |
15% |
33% |
26% |
26% |
| 1999 |
14% |
33% |
27% |
27% |
| 2000 |
16% |
33% |
28% |
24% |
| 2001 |
14% |
30% |
25% |
31% |
| 2002 |
14% |
31% |
25% |
29% |
| 2003 |
17% |
29% |
26% |
28% |
| 2004 |
14% |
29% |
27% |
30% |
| 2005 |
16% |
29% |
28% |
28% |
| 2006 |
14% |
29% |
28% |
29% |
| 2007 |
15% |
28% |
24% |
32% |
| 2008 |
16% |
31% |
24% |
29% |
| 2009 |
16% |
31% |
23% |
30% |
So, what we see here is that partly because of changing propensities to enter entrepreneurship (the Kauffman Index) and partly because of changing demographic patterns of the labor force that new entrepreneurs are getting older, more educated, less white and more likely to be immigrants.
Kauffman Index microdata for 2009 will be made available in the next couple of months. Currently, microdata is available through the website through 2008.