Immigration and Entrepreneurship in the United States
December 2020
Working Paper Number:
CES-20-44
Abstract
Immigrants can expand labor supply and compete for jobs with native-born workers. But immigrants may also start new firms, expanding labor demand. This paper uses U.S. administrative data and other data sources to study the role of immigrants in entrepreneurship. We ask how often immigrants start companies, how many jobs these firms create, and how firms founded by native-born individuals compare. A simple model provides a measurement framework for addressing the dual roles of immigrants as founders and workers. The findings suggest that immigrants act more as 'job creators' than 'job takers' and play outsized roles in U.S. high-growth entrepreneurship.
Document Tags and Keywords
Keywords
Keywords are automatically generated using KeyBERT, a powerful and innovative
keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant
keywords.
By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
corporation,
employee,
employ,
employed,
entrepreneurial,
venture,
entrepreneur,
entrepreneurship,
labor,
ethnicity,
immigrant,
innovator,
workforce,
immigrant entrepreneurs,
funding,
native,
immigration,
founder,
earner,
migrant,
immigrant workers
Tags
Tags are automatically generated using a pretrained language model from spaCy, which excels at
several tasks, including entity tagging.
The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Longitudinal Business Database,
W-2,
Census Bureau Disclosure Review Board,
Survey of Business Owners,
Census Numident,
Pew Research Center
Similar Working Papers
Similarity between working papers are determined by an unsupervised neural
network model
know as Doc2Vec.
Doc2Vec is a model that represents entire documents as fixed-length vectors, allowing for the
capture of semantic meaning in a way that relates to the context of words within the document. The model learns to
associate a unique vector with each document while simultaneously learning word vectors, enabling tasks such as
document classification, clustering, and similarity detection by preserving the order and structure of words. The
document vectors are compared using cosine similarity/distance to determine the most similar working papers.
Papers identified with 🔥 are in the top 20% of similarity.
The 10 most similar working papers to the working paper 'Immigration and Entrepreneurship in the United States' are listed below in order of similarity.
-
Working PaperWhose Job Is It Anyway? Co-Ethnic Hiring in New U.S. Ventures
March 2021
Working Paper Number:
CES-21-05
We explore co-ethnic hiring among new ventures using U.S. administrative data. Co-ethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging from 2% to 40%. Co-ethnic hiring grows with the size of the local ethnic workforce, greater linguistic distance to English, lower cultural/genetic similarity to U.S. natives, and in harsher policy environments for immigrants. Co ethnic hiring is remarkably persistent for ventures and for individuals. Co-ethnic hiring is associated with greater venture survival and growth when thick local ethnic employment surrounds the business. Our results are consistent with a blend of hiring due to information advantages within ethnic groups with some taste-based hiring.View Full Paper PDF
-
Working PaperMeasuring the Characteristics and Employment Dynamics of U.S. Inventors
September 2022
Working Paper Number:
CES-22-43
Innovation is a key driver of long run economic growth. Studying innovation requires a clear view of the characteristics and behavior of the individuals that create new ideas. A general lack of rich, large-scale data has constrained such analyses. We address this by introducing a new dataset linking patent inventors to survey, census, and administrative microdata at the U.S. Census Bureau. We use this data to provide a first look at the demographic characteristics, employer characteristics, earnings, and employment dynamics of inventors. These linkages, which will be available to researchers with approved access, dramatically increases the scope of what can be learned about inventors and innovative activity.View Full Paper PDF
-
Working PaperWho Gains from Creative Destruction? Evidence from High-Quality Entrepreneurship in the United States
October 2019
Working Paper Number:
CES-19-29
The question of who gains from high-quality entrepreneurship is crucial to understanding whether investments in incubating potentially innovative start-up firms will produce socially beneficial outcomes. We attempt to bring new evidence to this question by combining new aggregate measures of local area income inequality and income mobility with measures of entrepreneurship from Guzman and Stern (2017). Our new aggregate measures are generated by linking American Community Survey data with the universe of IRS 1040 tax returns. In both fixed effects and IV models using a Bartik-style instrument, we find that entrepreneurship increases income inequality. Further, we find that this increase in income inequality arises due to the fact that almost all of the individual gains associated with increased entrepreneurship accrue to the top 10 percent of the income distribution. While we find mixed evidence for small positive effects of entrepreneurship lower on the income distribution, we find little if any evidence that entrepreneurship increases income mobility.View Full Paper PDF
-
Working PaperGrowth Through Heterogeneous Innovations
June 2012
Working Paper Number:
CES-12-08
We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multiproduct firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.View Full Paper PDF
-
Working PaperThe Transformation of Self Employment
February 2022
Working Paper Number:
CES-22-03
Over the past half-century, while self-employment has consistently accounted for around one in ten of the United States workforce, its composition has changed. Since 1970, industries with high startup capital requirements have declined from 53% of self-employment to 23%. This same time period also witnessed declines in 'hometown' local entrepreneurship and the probability of the self-employed being among top earners. Using 2016 data, we show that high startup capital requirements are linked with lower profitability at small scales. The transition away from high startup capital industries appears most closely linked to changes in small business production functions and less due to advantageous reallocation to other opportunities, growth in returns-to-scale among large businesses, or a worsening of financing conditions and debt levels.View Full Paper PDF
-
Working PaperWealth, Tastes, and Entrepreneurial Choice
October 2015
Working Paper Number:
CES-15-34
The nonpecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of any financing constraints; (2) nonpecuniary entrepreneurs select into small-scale firms; and (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that nonpecuniary compensation is particularly relevant in discussions of small businesses.View Full Paper PDF
-
Working PaperForeign vs. U.S. Graduate Degrees: The Impact on Earnings Assimilation and Return Migration for the Foreign Born
June 2019
Working Paper Number:
CES-19-17
Using a novel panel data set of recent immigrants to the U.S., we identify return migration rates and earnings trajectories of two immigrant groups: those with foreign graduate degrees and those with a U.S. graduate degree. We focus on immigrants (of both genders) to the U.S. who arrive in the same entry cohort and from the same country of birth over the period 2005-2015. In Census-IRS administrative data, we find that downward earnings trajectories are predictive of return migration for immigrants with degrees acquired abroad. Meanwhile, immigrants with U.S.-acquired graduate degrees experience mainly upward earnings mobility.View Full Paper PDF
-
Working PaperJust Passing Through: Characterizing U.S. Pass-Through Business Owners
January 2017
Working Paper Number:
CES-17-69
We investigate the use of administrative data on the owners of partnerships and S-corporations to develop new statistics that characterize business owners. Income from these types of entities is "passed through" to owners to be taxed on the owners' tax returns. The information returns associated with such pass-through entities (Form K1 records) make it possible to link individual owners to the businesses they own. These linkages can be leveraged to associate measures of the demographic and human capital characteristics of business owners with the characteristics of the businesses they own. This paper describes measurement issues associated with administrative records on these pass-through entities and their integration with other Census data products. In addition, we document a number of interesting trends in business ownership among pass-through entities. We show a substantial decline in both entry and exit with less churn among both owners and owned businesses. We also show that the owners of pass-through entities are older, more likely to be male, and more likely to be white compared to the working population.View Full Paper PDF
-
Working PaperEarnings Inequality and Immobility for Hispanics and Asians: An Examination of Variation Across Subgroups
September 2021
Working Paper Number:
CES-21-30
Our analysis provides the rst disaggregated examination of earnings inequality and immobility within the Hispanic ethnic group and the Asian race group in the U.S. over the period of 2005-2015. Our analysis differentiates between long-term immigrant and native-born Hispanics and Asians relative to recent immigrants to the U.S. (post 2005) and new labor market entrants. Our results show that for the Asian and Hispanic population aged 18-45, earnings inequality is constant or slightly decreasing for the long-term immigrant and native-born populations. However, including new labor market entrants and recent immigrants to the U.S. contributes significantly to the earnings inequality for these groups at both the aggregate and disaggregated race or ethnic group levels. These findings have important implications for the measurement of inequality for racial and ethnic groups that have higher proportions of new immigrants and new labor market entrants in the U.S.View Full Paper PDF
-
Working PaperClusters of Entrepreneurship
October 2009
Working Paper Number:
CES-09-36
Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.View Full Paper PDF
