Yep, he did it again.
Economics Professor Robert Fairlie received the Bradford-Osborne Research Award for the second year in a row. The award—named after famed Black economists William Bradford, University of Washington professor emeritus of finance, and Alfred E. Osborne, Jr., senior associate dean for external affairs at UCLA’s Anderson School of Management—recognizes the year’s best paper, published in a peer-reviewed journal, on diversity and entrepreneurship.
Fairlie received the award this year for his years-long research on the lack of access to capital for Black-owned startups compared to white-owned startups. Black families are economically disadvantaged at the start, as their median income is $37,000 compared to white families at $63,000. The ratio of median household net worth for Black families to that of white families is 11-to-1, and only 7% of Black families own stocks or mutual funds compared with 23% of white families (U.S. Census Bureau 2016).
When Black entrepreneurs want to access start-up capital, the average level of capital Black entrepreneurs receive is $35,205 compared with $106,720 for white entrepreneurs. In the year the business is founded, Black owners contribute around $19,500 of personal equity compared with around $34,500 for white business owners.
Black entrepreneurs also apply for bank loans less frequently than white entrepreneurs, mainly due to fear of rejection. They are about three times more likely to state that they did not apply for credit when needed for fear of their loan application being denied.
“Racial inequality in business ownership is a huge issue, and there is a lot of work that needs to be done to change the perceptions and actual access to capital among traditionally underserved borrowers,” said Fairlie.
Fairlie first received the Bradford-Osborne Research Award in 2021 for his work exploring the impacts of COVID-19 on small businesses in the United States. Fairlie wrote one of the first papers on racial inequality in pandemic-related closures, which found that in the first three months of the pandemic, February-April 2020, minority-owned businesses were affected by closures at substantially higher rates than their white counterparts. Black business ownership dropped 41%, Latinx business ownership fell by 32%, and Asian business ownership dropped by 26%, compared to white-owned businesses, which fell by 17% during this period. Immigrant business owners also experienced substantial declines (36%), and female-business owners were disproportionately affected (25%).
Fairlie’s pandemic-related research sparked international media attention and led to congressional testimony before the U.S. House of Representatives and was used by then-Senator Kamala Harris for a bill supporting minority-owned businesses. Additional work showed that changes to the Paycheck Protection Program (PPP) had helped to improve racial equity in loan distribution. He is continuing to track his pandemic-related research and hopes to have an update later this year for the National Academy of Sciences.
“I’m excited and deeply honored to be recognized again for this award,” said Fairlie. “Dr. Bradford and Dr. Osborne were ahead of their time and have done so much for this field, specifically on topics related to diversity in business ownership.”
