The impact of education histories on the decision to become self-employed: a study of young, aspiring, minority business owners M. Kathleen Thomas Accepted: 9 January 2009 / Published online: 5 May 2009 Ó Springer Science+Business Media, LLC. 2009 Abstract Although it is well documented that minorities are underrepresented among the self- employed, no study to date has examined how limited educational opportunity might be responsible. Using data from the High School and Beyond Fourth Follow-Up survey and controlling for detailed edu- cational histories, this study finds that most variables associated with academic success actually reduce the likelihood one will aspire to own their own business at an early age. Positive developers of self-employ- ment aspirations include financial resources and having a parent who is already self-employed. Asians and males are also more likely to anticipate owning their own business. Keywords Academic success  Aspiring entrepreneurs  Educational history  Minorities  Self-employment entry JEL Classifications J15  L26 1 Introduction Owning your own business is the classic American dream to many and one of the forces bringing immigrants to America’s shores even today. This study examines the importance of education in shaping early desires to become self-employed, paying particular attention to the choices of minor- ities. This research advances the literature in two ways: (1) by examining the aspirations of young entrants into the labor market and (2) by controlling for detailed education histories. Although the dearth of minority representation among the self-employed is well documented (e.g., Fairlie and Meyer 1996; Fairlie and Robb 2008), most studies of these employment patterns utilize models that control for education with a simple binary variable measuring educational attainment (Fairlie 1999). Although the results are mixed, 1 overall the research to date indicates that educational attainment, measured by years of schooling or education level, is an impor- tant determinant of who chooses to become M. K. Thomas (&) Mississippi State University, P.O. Box 9580, 312 McCool Hall, Starkville, MS 39762, USA e-mail: kthomas@cobilan.msstate.edu 1 For example, Brock et al. (1986) find that college graduates are more likely to become self-employed while Fairlie (1999) concludes that the link between education and self-employ- ment is weak for both whites and blacks. Fairlie (2006) finds that low levels of education are partly responsible for the relatively low self-employment entry rates for blacks and Hispanics. Bates and Lofstrom (2007) find that education positively predicts self-employment entry for industries requir- ing high-level skills. In a meta-analysis of research on industrial countries, van der Sluis et al. (2003) find that the relationship between education and selection into entrepre- neurship is insignificant. See Fairlie and Robb (2008) for a review of literature on education and self-employment. 123 Small Bus Econ (2009) 33:455–466 DOI 10.1007/s11187-009-9201-y