Earnings from running a business is more highly varied than income from working for someone else. Business owners whose companies are successful tend to earn a lot more than business owners whose companies are unsuccessful. But among those who work for wages, variance in pay among high and low performers is lower than among entrepreneurs.
This difference means that the more of Americans’ income come from their entrepreneurial efforts, the more inequality in income we should observe.
Read more: Entrepreneurship and Income Inequality
