Does Having a Higher Percent of Women-Owned Businesses Correlate with a Decreased Poverty Rate in the United States at the State Level? Evidence from the U.S. Census Bureau and Survey of Business Owners

Abstract

Despite constituting over half of our population, women own only 28.8% of nonfarm

businesses in the United States (Survey of Business Owners 2007). There may be

benefits to increasing the proportion of women-owned businesses to more accurately

reflect the representation of women in the population. I hypothesize that having a higher

percent of women-owned businesses at the state level reduces state poverty rates. Using

data from the U.S. Census and the Survey of Business Owners as well as other sources

during the years 1992, 1997, 2002 and 2007, I find a negative but statistically

insignificant correlation between the percent of women-owned businesses and the

poverty rate at the state level when controlling for year fixed effects and other covariates.

I additionally find an unexpected and statistically significant positive correlation between

the percent of women-owned businesses and the poverty rate at the state level when

controlling for state fixed effects and other covariates, but these results are limited due to

measurement inconsistencies in the data. These findings are therefore limited and

inconclusive.