The financial crisis and the Great Recession were not good for people in business for themselves. Between 2007 and 2010, the number of self-employed Americans dropped 7.4 percent as recently released Small Business Administration (SBA) data shows.
As bad as this might sound, the situation was worse for several demographic groups:
• Self-employment declined more among men than women. The number of self-employed men declined 8 percent from 2007 to 2010, while the number of self-employed women dropped only 6.3 percent.
• Minority self-employment dropped more than White self-employment. Between 2007 and 2010, the number of Whites (Caucasians) in business for themselves declined 6.5 percent. Among Hispanics, the drop was 11.3 percent, and among Asians it was 12.3 percent. For Blacks (African Americans), the decrease in self-employment was a whopping 17.1 percent.
• Self-employment among the young fell, while among older people it increased. The number of self-employed people under the age of 25 fell 11.8 percent between 2007 and 2010. For people aged 25 to 24, the decline was 11.2 percent; for those aged 35 to 44, 18.2 percent; and those 45-54, 8.3 percent. By contrast, the number of self-employed Americans aged 55-64 rose a slight 0.4 percent, while the number of Americans over 65 in business for themselves increased a solid 8.5 percent.
• Self-employment declined more among the less educated. Between 2007 and 2010, the number of self-employed Americans without any college education dropped 10.5 percent, while the number with some college declined 11.6 percent. The number of people in business for themselves with a bachelor’s degree fell a more modest 4.7 percent. But those with a master’s degree or higher increased 4.6 percent over the three year period.
• Rural self-employment dropped more than self-employment in urban or suburban areas. The number of self-employed Americans living in central cities declined 5.6 percent between 2007 and 2010, while in suburban areas, it fell 8.4 percent. In rural areas, it decreased 11.8 percent.
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