Business-owning
Households More Likely Than Others
to Have Higher Income and Wealth
WASHINGTON,
D.C. – Does small business ownership help increase a household’s overall
well-being? One way to look at this is to examine how the income and wealth of
households owning small businesses changed in the most recent economic expansion
and recovery period. That task was undertaken in a study just released by the
U.S. Small Business Administration’s Office of Advocacy.
“The
report released today finds that households owning small firms in the 1998-2007
period were more likely than other households to be in the top 50 percent in income
and wealth,” said Susan M. Walthall, Acting Chief Counsel for Advocacy. “It
will be important to continue to examine this data series to assess the well-being
of small businesses in the current economic environment.”
Income
and Wealth: How Did Households Owning Small Businesses Fare from 1998 to 2007?
by George W. Haynes, updates previous Advocacy-sponsored studies and is based
on additional data from the 2007 Survey of Consumer Finances. Household income
is the sum of wages, salaries, interest, dividends, asset sales, rents, and other
income sources. Household wealth is estimated by generating a balance sheet subtracting
total liabilities from total assets. Findings include the following:
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.
In the latter part of the period—between
2004 and 2007—the likelihood that households owning a small business had
a high income increased by 4.2 percent and the likelihood that they had a high
level of wealth increased by more than 20 percent, compared with increases of
2.1 and 5.2 percent, respectively, in households not owning businesses.
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.
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.
For a copy of the study, visit
the Office of Advocacy website at www.sba.gov/advo.
Source:
Office
of Advocacy
U.S. Small Business Administration
NEWSRELEASE
For
Release: January 28, 2010
Contact: Kathryn Tobias, (202) 205-6938
kathryn.tobias@sba.gov
SBA Number: 10-01 ADVO
The Office of Advocacy of
the U.S. Small Business Administration (SBA) is an independent voice for small
business within the federal government. The presidentially appointed Chief Counsel
for Advocacy advances the views, concerns, and interests of small business before
Congress, the White House, federal agencies, federal courts, and state policymakers.
For more information, visit www.sba.gov/advo, or call (202) 205-6533.
