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New Study Links African-American Entrepreneurship with Decline in Youth Violence

Written by Amanda Maher

Sociologists, criminologists and economists have spent more than a decade hypothesizing about the root causes for the 1990s’ dramatic decline in urban violence. Were new policing tactics working? Or was the precipitous decline a result of the stronger economy? Maybe it was the investments in urban education that so many cities touted.

All of these hypotheses left out another major possibility: that an increase in African-American entrepreneurship was linked with a decline in youth violence.

A study by Karen Parker, a professor of sociology and criminal justice at the University of Delaware, published last year in the Urban Affairs Review, finds a strong association between these two factors. “By looking at business ownership, we’re seeing [Black business owners’] presence in their neighborhoods…and how they are having a very positive impact on the violence there, specifically among youth,” Parker told The Skanner.

Prior research had largely discounted the fact that African-American business ownership had increased 48 percent between 1990 and 2000, increasing its share from 7.6 percent to 9.6 percent of all entrepreneurs nationally. In the early 2000s, when business formation was slow following the September 11 terrorist attacks, the number of African-American owned businesses increased by more than 60 percent – three times the national average. During that same time period, violent crime dropped 29 percent in large cities across the country.

After controlling for a number of other variables such as poverty and unemployment rates, Parker was able to isolate association between black entrepreneurship and youth violence. A review of data in the nation’s top 100 metro areas presents a startling discovery: there is a significant correlation between black entrepreneurship and youth violence in those communities. The two variables have an inverse relationship; as black business formation increases, youth violence decreases.

This research suggested this relationship exists for three reasons:

  • African-American business owners served as positive role models to youth in their community, by impressing upon them the importance of hard work. These role models provided a safe haven and sounding board for community youth, the report says.
  • Entrepreneurs tend to be highly involved in their communities through business and social organizations, churches and schools. These African-American entrepreneurs become “social buffers” by reshaping how youth view the black community’s role in institutions like businesses, education and government. By reshaping these social constructs, they reshape how youth view their own role in the community. “[Black business owners] reinforce values and expectations about social institutions, which guide the youth away from violence,” the study finds.
  • Black-owned businesses bring an inflow of resources into the community, in the form of jobs and economic opportunities that help lift urban residents out of poverty. This strengthens the local economy and improves community conditions, resulting in lower crime rates.

The data also indicate that the number of paid employees at a business doesn’t seem to have an impact on the drop in crime, meaning that even the smallest of businesses can have an impact in their community.

Entrepreneurship is important to all neighborhoods, but Parker’s study moves the needle forward by showing just how significant the social impact of African-American-owned business is in urban communities.

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