Income and Wealth: How Did Households Owning Small Businesses Fare from 1998 to 2007?
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As reported by the Office of Advocacy, Small Business Administration.
How did the distribution of income and wealth for households owning small businesses change in the expansion and recovery period of the American economy from 1998 to 2007? This report updates previous studies and is based on additional data from the 2007 Survey of Consumer Finances. The study finds that households owning small businesses in the 1998-2007 period had a higher probability than other households of being within the top 50 percent in income and wealth. Other findings include the following:
o Households owning any business were significantly more likely to be high income earners in 2007 than in 1998; the largest percentage gain was among owners with more than one business.
o The characteristics of households and businesses were somewhat different in 1998 than in 2007. By 2007, high income households were headed by younger people, while higher wealth households were headed by older people, and high income and wealth households were more likely to own public stock and real estate.
o By 2007, the income gap between households with and without small businesses had widened slightly and the wealth gap had remained about the same.
o However, households owning small businesses did much better from 2004 to 2007. The likelihood of households owning a small business being high income increased by 4.2 percent and their likelihood of being high wealth increased by more than 20 percent, compared with comparable increases of 2.1 and 5.2 percent in households not owning businesses.
o From 1998 to 2007, households not owning a business increased real mean wealth by just under 40 percent; the comparable increase for those owning a small business was 63.4 percent.
A copy of the report is located at: http://www.sba.gov/advo/research/rs357tot.pdf and the research summary can be found at: http://www.sba.gov/advo/research/rs357.pdf.
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