RSS Feed Link

Entrepreneurship Key to Poverty Reduction

on November 19, 2012 Source: Policy Dialogue on Entrepreneurship

U2's Bono is the only one championing the cause of startups in the fight for poverty reduction and sustainable economic growth--and it isn't restricted to Africa or emerging economies either. A new study by the Goldwater Institute points to a "strong connection between a state's rate of entrepreneurship and declines in poverty"--put simply, more entrepreneurs equals less poverty.

The Arizona-based institute examined state-level data from 2001-2007 and found that each percentage point increase in the rate of entrepreneurship in a state corresponded to a 2 percent decline in the poverty rate.

The five states with the largest reductions in the poverty rate during those years averaged a 25 percent reducation--Hawaii (-34.21), North Dakota (-32.61), Arkansas (-22.47), New Mexico (-22.22) and Idaho (-13.91). At the opposite end of the spectrum, the three states with the highest increase in poverty during those years--Delaware, Indiana and Wisconsin--also happened to be the three states with the lowest rates of entrepreneurship.

The study's author, Stepen Slivinsky, calls for policymakers to put a priority on promoting entrepreneurial growth and suggests lowering tax burdens as a principal approach. slivinsky points to data from the Goldwater study that shows "for every 1 percentage point increase in the tax burden, there's a corresponding 1 percentage point drop in the entrepreneurship rate."

Category:  Capitol Hill  Growth & Poverty  Tags:  Goldwater Institute, Bono

comments powered by Disqus

Search PDE

Policy Dialogue on Entrepreneurship Get Your Weekly Digest

Register today to receive news and updates from

Email Newsletter Signup

Past eNewsletters

View All

Email Newsletters

Want to be up-to-date with the latest news and updates from To subscribe, just give us your email address below; you'll choose which e-newsletters you'd like to receive on the next screen.