However, let us first see how the owners of small businesses distribute on different quintiles
in the period under consideration. Table 2 describes the location of wage earners and the owners of
small businesses on the distribution scale of post-tax incomes on the two definitions of small business
owner. Table 2 shows the distribution of wage earners and business owners in the overall distributions
of post-tax income, but where percentage shares for each occupation group sum to 100. The results of
Table 2 reflect the wider dispersion of incomes among business owners. Whereas wage earners are
more or less equally distributed on quintiles, owners of small businesses are much more likely to be
found in quintiles 1 and 5. For instance, 25 percent of all owners of small businesses were in quintile 1
in 1993, according to the wide definition. It is also important to note how the wide definition increases
the share of owners ending up in quintile 5, especially at the end of the period, which is in accordance
with expectations. However, the difference is small.
Table 2. Distributions of wage earners and owners of small businesses, according to two
definitions. Distributions on quintiles for each group, 1993-2003
|
Wage earners |
Owners of small businesses, |
Owners of small businesses, wide | |||||||||||||
|
Year |
Qi |
Q2 |
Q3 |
Q4 |
Q5 |
Q1 |
Q2 |
Q3 |
Q4 |
Q5 |
Q1 |
Q2 |
Q3 |
Q4 |
Q5 |
|
-93 |
19.1 |
21.0 |
21.2 |
20.7 |
18.0 |
28.6 |
13.8 |
12.1 |
14.5 |
31.0 |
25.1 |
13.8 |
13.1 |
15.8 |
32.1 |
|
-94 |
19.1 |
21.1 |
21.2 |
20.7 |
17.9 |
29.2 |
13.2 |
11.9 |
14.5 |
31.2 |
25.6 |
13.3 |
12.8 |
15.8 |
32.6 |
|
-95 |
18.9 |
21.2 |
21.3 |
20.7 |
17.8 |
30.2 |
12.9 |
11.6 |
14.5 |
30.8 |
26.5 |
12.9 |
12.3 |
15.7 |
32.6 |
|
-96 |
18.9 |
21.2 |
21.3 |
20.7 |
17.9 |
30.3 |
13.2 |
12.0 |
14.5 |
30.0 |
26.3 |
13.0 |
12.6 |
15.8 |
32.4 |
|
-97 |
18.9 |
21.2 |
21.3 |
20.7 |
17.9 |
30.3 |
13.5 |
12.0 |
14.8 |
29.5 |
26.2 |
13.1 |
12.5 |
15.9 |
32.3 |
|
-98 |
19.1 |
21.3 |
21.3 |
20.6 |
17.8 |
28.9 |
13.2 |
12.4 |
15.6 |
30.0 |
25.1 |
12.7 |
12.8 |
16.7 |
32.8 |
|
-99 |
19.0 |
21.3 |
21.3 |
20.6 |
17.9 |
29.9 |
12.9 |
12.3 |
15.6 |
29.3 |
25.9 |
12.5 |
12.7 |
16.6 |
32.3 |
|
-00 |
19.3 |
21.4 |
21.3 |
20.5 |
17.6 |
27.9 |
12.5 |
12.6 |
16.3 |
30.7 |
24.2 |
12.1 |
12.8 |
17.1 |
33.8 |
|
-01 |
19.1 |
21.4 |
21.3 |
20.5 |
17.7 |
28.1 |
12.5 |
12.4 |
16.1 |
30.8 |
24.9 |
12.3 |
12.8 |
17.2 |
32.8 |
|
-02 |
19.3 |
21.4 |
21.2 |
20.5 |
17.5 |
27.0 |
12.6 |
12.7 |
16.3 |
31.5 |
23.8 |
12.3 |
12.9 |
16.9 |
34.0 |
|
-03 |
18.6 |
21.4 |
21.4 |
20.8 |
17.8 |
32.1 |
12.2 |
11.9 |
14.3 |
29.5 |
27.9 |
11.9 |
12.1 |
15.1 |
32.9 |
Another way of addressing the distribution of small business owners across quintiles is to
calculate the proportion of owners in different quintiles. This is done in Table 3, where we compare
the narrow and the wider definitions. In contrast to Table 2, the figures in Table 2 reflect the size of
the business owner sector relative to the wage earner sector across quintiles. For instance, in 1993, in
the lowest quintile of the income hierarchy, 16.3 percent were owners of small businesses, whereas the
corresponding estimate for the 20 percent richest was 17.6 percent.
11