I find evidence that human capital spillovers have positive effects on the proclivity of low human capital immigrants to self-employ. Human capital spillovers within an ethnic community can increase the self-employment propensity of its members by decreasing the costs associated with starting and running a business (especially, transaction costs and information costs). Immigrants who do not speak English and those with little formal education are more likely to be self-employed if they reside in an ethnic community boasting higher human capital. On the other hand, the educational attainment of co-ethnics does not appear to affect the self-employment choices of immigrants with a post-secondary education to become self-employed. Further analysis suggests that immigrants in communities with more human capital choose industries that are more capital-intensive. Overall, the results suggest that the communities in which immigrants reside influences their self-employment decisions. For low-skilled immigrants who face high costs to learning English and/or acquiring more education, these human capital spillovers may serve as an alternative resource of information and labor mobility.
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HUMAN CAPITAL TRAPS? ENCLAVE EFFECTS USING LINKED EMPLOYER-HOUSEHOLD DATA
June 2013
Working Paper Number:
CES-13-29
This study uses linked employer-household data to measure the impact of immigrant social networks, as identified via neighborhood and workplace affiliation, on immigrant earnings. Though ethnic enclaves can provide economic opportunities through job creation and job matching, they can also stifle the assimilation process by limiting interactions between enclave members and non-members. I find that higher residential and workplace ethnic clustering among immigrants is consistently correlated with lower earnings. For immigrants with a high school education or less, these correlations are primarily due to negative self-selection. On the other hand, self-selection fails to explain the lower earnings associated with higher ethnic clustering for immigrants with post-secondary schooling. The evidence suggests that co-ethnic clustering has no discernible effect on the earnings of immigrants with lower education, but may be leading to human capital traps for immigrants who have more than a high school education.
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A Warm Embrace or the Cold Shoulder: Wage and Employment Outcomes in Ethnic Enclaves
April 2008
Working Paper Number:
CES-08-09
This paper examines how immigrant enclaves influence labor market outcomes. We examine the effect of ethnic concentration on both immigrant earnings and employment in high immigration states using the non-public use, 1-in-6 sample of the 2000 U.S. Census. Although we find that there is some variability in the estimated enclave effects, they exhibit an overall negative impact. Male and female immigrants from several ethnic groups tend to earn lower wages when residing in areas with larger ethnic concentrations. Similarly, for employment, most of the statistically significant effects are negative, although much smaller than the enclave impacts on earnings.
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Spatial Influences on the Employment of U.S. Hispanics: Spatial Mismatch, Discrimination, or Immigrant Networks?
January 2009
Working Paper Number:
CES-09-03
Employment rates of Hispanic males in the United States are considerably lower than employment rates of whites. In the data used in this paper, the Hispanic male employment rate is 61 percent, compared with 83 percent for white men.1 The question of the employment disadvantage of Hispanic men likely has many parallels to the question of the employment disadvantage of black men, where factors including spatial mismatch, discrimination, and labor market networks have all received attention as contributing factors. However, the Hispanic disadvantage has been much less studied, and the goal of this paper is to bridge that gap. To that end, we present evidence that tries to assess which of the three factors listed above appears to contribute to the lower employment rate of Hispanic males. We focus in particular on immigrant Hispanics and Hispanics who do not speak English well.
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Workplace Concentration of Immigrants
November 2010
Working Paper Number:
CES-10-39R
To what extent do immigrants and the native-born work in separate workplaces? Do worker and employer characteristics explain the degree of workplace concentration? We explore these questions using a matched employer-employee database that extensively covers employers in selected MSAs. We find that immigrants are much more likely to have immigrant coworkers than are natives, and are particularly likely to work with their compatriots. We find much higher levels of concentration for small businesses than for large ones, that concentration varies substantially across industries, and that concentration is particularly high among immigrants with limited English skills. We also find evidence that neighborhood job networks are strongly positively associated with concentration. The effects of networks and language remain strong when type is defined by country of origin rather than simply immigrant status. The importance of these factors varies by immigrant country of origin'for example, not speaking English well has a particularly strong association with concentration for immigrants from Asian countries. Controlling for differences across MSAs, we find that observable employer and employee characteristics account for about half of the difference between immigrants and natives in the likelihood of having immigrant coworkers, with differences in industry, residential segregation and English speaking skills being the most important factors.
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Are Immigrants More Innovative? Evidence from Entrepreneurs
November 2023
Working Paper Number:
CES-23-56
We evaluate the contributions of immigrant entrepreneurs to innovation in the U.S. using linked survey-administrative data on 199,000 firms with a rich set of innovation measures and other firm and owner characteristics. We find that not only are immigrants more likely than natives to own businesses, but on average their firms display more innovation activities and outcomes. Immigrant owned firms are particularly more likely to create completely new products, improve previous products, use new processes, and engage in both basic and applied R&D, and their efforts are reflected in substantially higher levels of patents and productivity. Immigrant owners are slightly less likely than natives to imitate products of others and to hire more employees. Delving into potential explanations of the immigrant-native differences, we study other characteristics of entrepreneurs, access to finance, choice of industry, immigrant self-selection, and effects of diversity. We find that the immigrant innovation advantage is robust to controlling for detailed characteristics of firms and owners, it holds in both high-tech and non-high-tech industries and, with the exception of productivity, it tends to be even stronger in firms owned by diverse immigrant-native teams and by diverse immigrants from different countries. The evidence from nearly all measures that immigrants tend to operate more innovative and productive firms, together with the higher share of business ownership by immigrants, implies large contributions to U.S. innovation and growth.
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Shift or replenishment? Reassessing the prospect of stable Spanish bilingualism across contexts of ethnic change
June 2023
Working Paper Number:
CES-23-28
Much of the existing literature on Latinos' use of Spanish claims that a general pattern of intergenerational decline in the use of Spanish will produce an overall shift away from Spanish use in the U.S. (Rumbaut, Massey, and Bean 2006; Veltman 1983b, 1990). In contrast, recent works emphasize the importance of the social and linguistic context in reinforcing the use of Spanish as well as (pan)ethnic identities among U.S.-born Latinos (Linton 2004; Linton and Jim'nez 2009; Stevens 1992). This literature suggests conditions under which Spanish-English bilingualism might become stable at the level of metropolitan areas; however, such conditions depend on how immigration shapes the context of language use for native-born Latinos. Given the declining levels of immigration from Latin America, will bilingualism subside in the U.S., or have certain communities created conditions in which bilingualism can be stable? Using geocoded data from restricted access versions of the Survey of Income and Program Participation (SIPP) and the American Community Survey (ACS), we model the probability of Spanish-English bilingualism among second- and third-generation Latinos using multilevel models with contextual measures of immigration and language use at both the neighborhood and metropolitan levels. We find evidence that U.S.-born Latinos are heavily influenced by the prevalence of Spanish use among U.S. born Latinos at both the metropolitan and neighborhood levels. Further, the proportion of foreign-born Latinos has little effect on the native born, after controlling for Spanish use among U.S,-born Latinos. These results are a first step in understanding the link between ethnic or panethnic contexts and language practices, and also in producing a better characterization of stable bilingualism that can be tested quantitatively.
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Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States
December 2006
Working Paper Number:
CES-06-32
Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons . Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.
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Leapfrogging the Melting Pot? European Immigrants' Intergenerational Mobility Across the 20th Century
August 2021
Working Paper Number:
CES-21-20
During the early twentieth century, industrial-era European immigrants entered the United States with lower levels of education than the U.S. average. However, empirical research has yielded unclear and inconsistent evidence about the extent and pace of their integration, leaving openings for arguments that contest the narrative that these groups experienced rapid integration and instead assert that educational deficits among lower-status groups persisted across multiple generations. Here, we advance another argument, that European immigrants may have 'leapfrogged' or exceeded U.S.-born non-Hispanic white attainment by the third generation. To assess these ideas, we reconstituted three-generation families by linking individuals across the 1940 Census, years 1973, 1979, 1981-90 of the Current Population Survey, the 2000 Census, and years 2001-2017 of the American Community Survey. Results show that most European immigrant groups not only caught up with U.S.-born whites by the second generation, but surpassed them, and this advantage further increased in the third generation. This research provides a new understanding of the time to integration for 20th century European immigrant groups by showing that they integrated at a faster pace than previously thought, indicative of a process of accelerated upward mobility.
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Is the Melting Pot Still Hot? Explaining the Resurgence of Immigrant Segregation
August 2004
Working Paper Number:
CES-04-10
This paper uses decennial Census data to examine trends in immigrant segregation in the United States between 1910 and 2000. Immigrant segregation declined in the first half of the century, but has been rising steadily over the past three decades. Analysis of restricted access 1990 Census microdata suggests that this rise would be even more striking if the native-born children of immigrants could be consistently excluded from the analysis. We analyze panel and cross-sectional variation in immigrant segregation, as well as housing price patterns across metropolitan areas, to test four hypotheses of immigrant segregation. Immigration itself has surged in recent decades, but the tendency for newly arrived immigrants to be younger and of lower socioeconomic status explains very little of the recent rise in immigrant segregation. We also find no evidence of increased nativism in the housing market. Evidence instead points to changes in urban form, particularly the tendency for ethnic enclaves to form as suburbanizing households leave older neighborhoods, as a central explanation for the new immigrant segregation.
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Immigrant Status, Race, and Institutional Choice in Higher Education
March 1998
Working Paper Number:
CES-98-04
This paper examines the postsecondary enrollment decisions of immigrant students, expanding on previous work by explicitly considering their choices among institution types and by examining differences across generations and racial/ethnic categories. Using data from the National Educational Longitudinal Study (NELS:88), we hypothesize that community colleges may play a more significant role in providing access to higher education for immigrants than for the native-born population. Our results support our hypothesis only among Asian immigrants. First-generation black immigrants have a higher probability of enrolling in private vocational schools, while second-generation Hispanics (and native blacks) have a higher probability of enrolling in both public and private four-year colleges and universities. Survey (1988)
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