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Market-Based Disparities in Business Formation and Business Owner Earnings
E. Evidence from the Survey of Business Owners
As a final check on the statistical findings in this Chapter, we present evidence from a Census
Bureau data collection effort dedicated to M/WBEs. The Census Bureau’s Survey of Business
Owners and Self-Employed Persons (SBO), formerly known as the Survey of Minority- and
Women-Owned Business Enterprises (SMWOBE), collects and disseminates data on the number,
sales, employment, and payrolls of businesses owned by women and members of racial and
ethnic minority groups. This survey has been conducted every five years since 1972 as part of
the Economic Census program. Data from the 2007 SBO, the most recent, were released in 2011.
The SBO estimates are created by matching data collected from income tax returns by the
Internal Revenue Service with Social Security Administration data on race and ethnicity, and
supplementing this information using statistical sampling methods. The unique field for
conducting this matching is the Social Security Number (SSN) or the Employer Identification
Number (EIN), as reported on the tax return. 249
The SBO covers women and five groups of minorities: (1) African Americans, (2) Hispanics,
(3) Asians, (4) Native Hawaiians and Pacific Islanders, and (5) American Indians and Alaskan
Natives. The 2007 SBO also includes comparative information for nonminority male-owned
firms. 250
The SBO provides aggregate estimates of the number of minority-owned and women-owned
firms and their annual sales and receipts. The SBO distinguishes employer firms (i.e., firms with
one or more paid employees) from nonemployer firms, and for the former also includes estimates
of aggregate annual employment and payroll.
Compared to the ACS PUMS, the SBO is more limited in the scope of industrial and geographic
detail it provides. Nonetheless, it contains a wealth of information on the character of minority
and female business enterprise in the U.S as a whole as well as in the State of Ohio. 251 In the
remainder of this section, we present SBO statistics for the United States as a whole and in Ohio
and calculate disparity indices from them. We find that results in the SBO regarding disparities
are consistent with our findings above using the ACS PUMS.
Tables 5.13 and 5.14 contain data for all industries combined. Table 5.13 is for the U.S. as a
whole, Table 5.14 is for the State of Ohio. Panel A in these two tables summarizes the SBO
results for each race and/or gender grouping. For example, Panel A of Table 5.13 shows a total
of 26.29 million firms in the U.S. in 2007 (column 1) with overall sales and receipts of $10.949
249 Prior to 2002, “C” corporations were not included in the SMWOBE universe due to technical difficulties. This
has been rectified in the 2002 SBO. For more information, consult the discussion of SBO survey methodology at
http://www.census.gov/econ/sbo/.
250 In the ACS PUMS data, discussed above, the unit of analysis is the business owner, or self-employed person. In
the SBO data the unit of analysis is the business rather than the business owner. Furthermore, unlike most other
business statistics, including the other components of the Economic Census, the unit of analysis in the SBO is the
firm, rather than the establishment.
251 It is, in general, not possible with the SBO dataset to examine geographic divisions below the state level.
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