Entrepreneurial Activity and Wealth Inequality: A Historical Perspective

Posted: 4 Nov 2009

See all articles by Carolyn M. Moehling

Carolyn M. Moehling

Rutgers University, Department of Economics; National Bureau of Economic Research (NBER)

Richard H. Steckel

Ohio State University (OSU) - Economics; National Bureau of Economic Research (NBER)

Date Written: 2004

Abstract

The "Kuznets curve" suggests that economicinequality first increases and then decreases during times of rapid economicgrowth.As influenced by the Kuznets curve, this research examines thecorrelation between entrepreneurial activity and wealth inequality by analyzinghistorical data from nineteenth century Massachusetts. The data for this study were collected from a variety of sources, includingMassachusetts' federal census data between 1820 and 1910 and property taxrecords.The limitations and advantages of each data set werediscussed.The development of wealth inequality is analyzed according tothree measures, which are the shares of total wealth possessed by the toppercentiles of the wealth distribution, the Gini coefficient, and the Theilentropy measure.The relationship between wealth inequality andentrepreneurial activity is examined, and an operational definition andexamples of entrepreneurial activities are included in thestudy.Additionally, the link between entrepreneurship and thedistribution of wealth is examined. The results of the data analyses indicate that entrepreneurial activity wasincreasing toward the end of the century, coinciding with the growth ofindustry and with the growth of wealth inequality.However, this increasein equality was indicated to be a result of changes within the non-entrepreneurpopulation.The implications of fluctuating rates of self-employment arealso discussed. (AKP)

Keywords: Entrepreneurial activity, Economic development, Self-employment, Income distribution, Wealth distribution, Economic inequality

Suggested Citation

Moehling, Carolyn Marie and Steckel, Richard H., Entrepreneurial Activity and Wealth Inequality: A Historical Perspective (2004). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1497272

Carolyn Marie Moehling (Contact Author)

Rutgers University, Department of Economics ( email )

75 Hamilton Street
New Brunswick, NJ 08901
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Richard H. Steckel

Ohio State University (OSU) - Economics ( email )

1945 North High Street
Columbus, OH 43210-1172
United States
614-292-5008 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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