The African-American Entrepreneur–Crime Drop Relationship

Abstract

Although much of the urban violence literature focuses on the link between urban disadvantage and crime rates, in this article we explore the relationship between African-American entrepreneurship and rates of juvenile violence, net of the effects associated with labor market shifts and the concentration of disadvantage within these areas. That is, Black-owned businesses have increased considerably over time but have largely been neglected in the criminological literature. After generating two distinct measures of Black entrepreneurship, we test to see if Black-owned businesses were significant to the documented decline in juvenile violence in larger U.S. cities from 1990 to 2000. We find an inverse relationship between entrepreneurship and juvenile arrests involving violence across multiple cities in 1990 and 2000. Furthermore, when estimating a pooled cross-sectional time-series design, the growing presence of African-American businesses is a significant contributor to the change (decline) in Black youth violence during the period of the 1990 crime drop, while the rate of paid employees in Black firms remained unrelated to Black youth violence. In changing economic times, we discuss the importance of exploring ways to capture the presence of African-Americans in the urban economy.