The last few decades have witnessed a notable rise in both self-employment and small business ownership in most developed economies, and much public policy in this context has been directed toward increasing the supply of entrepreneurs (Blanchflower, 2000; Steinmetz and Wright, 1989). At the same time, many countries have experienced increasing income inequality and stratified unemployment (Atkinson, 2003; Autor, 2014; Goldthorpe, 2010). Despite these two parallel economic trends, studies that probe the direct relationship between entrepreneurship and overall workforce inequality remain scant in the still largely separate literatures on entrepreneurship and inequality (Van and Versloot, 2007; Wright and Zahra, 2011). In the entrepreneurship literature, many studies have documented a two-pronged effect of entrepreneurship on individual income, arguing that entrepreneurship is a source of enhanced income mobility for some but results in lowerthan-average incomes for the large fraction of the self-employed workforce (e.g., Hamilton, 2000; Åstebro et al., 2011). However, attention to the potential implications of these patterns for macro-level income distribution has been scant in the entrepreneurship literature. In the inequality literature, recent studies have developed new types of models to decompose and problematize different sources of income inequality (e.g., Cowell and Fiorio, 2011; Creedy and Hérault, 2011; Thewissen et al., 2013), but these studies have tended to overlook entrepreneurship as one of these potential sources. This oversight is problematic since entrepreneurship is an increasingly prevalent occupational choice in many economies (Audretsch, 2009). In this paper, we seek to address this gap in the literature, which also forms the basis of our overall research questions: (1) Does entrepreneurship affect overall workforce income inequality? (2) Which aspects of the income distribution affect overall inequality and to what extent? (3) What individual characteristics among entrepreneurs (compared to employed workers) may account for the effects observed in Questions 1 and 2? To account for the fact that self-employed entrepreneurs are over-represented in both tails of the earnings distribution (Åstebro et al., 2011), we allow for two types of entrepreneurs—those who are self-employed in sole proprietorships (SE) and those who are self-employed in incorporated businesses (ISE)—and we compare these two groups with salaried workers (W). While entrepreneurs are found to earn less than salaried workers on average, recent studies, such as Levine and Rubinstein (2017), Åstebro and Tåg (2017), and Özcan (2011), have suggested that even though this is true for SE-entrepreneurs, ISEentrepreneurs tend to earn relatively more even when compared to employees with comparable traits and skills. Thus, in distinguishing between SE and ISE, we allow for the possibility that different types of entrepreneurship, or different types of entrepreneurs, may differ in their effects on total income distribution.