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.
-
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.
View Full
Paper PDF
-
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.
View Full
Paper PDF
-
Determinants Of Survival And Profiability Among Asian Immigrant-Owned Small Businesses
August 1993
Working Paper Number:
CES-93-11
The immigrant entrepreneur is often seen as a member of supportive peer and community subgroups. These networks assist in the creation and successful operation of firms by providing social resources in the form of customers, loyal employees and financing. This study provides evidence that the success and survival patterns of Asian immigrant firms derive from their large investments of financial capital and the impressive educational credentials of the business owners. Heavy utilization of social support networks typifies the less profitable, more failure-prone small businesses owned by Asian immigrants.
View Full
Paper PDF
-
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.
View Full
Paper PDF
-
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.
View Full
Paper PDF
-
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.
View Full
Paper PDF
-
How Does Geography Matter in Ethnic Labor Market Segmentation Process? A Case Study of Chinese Immigrants in the San Francisco CMSA
March 2007
Working Paper Number:
CES-07-09
In the context of continuing influxes of large numbers of immigrants to the United States, urban labor market segmentation along the lines of race/ethnicity, gender, and class has drawn considerable growing attention. Using a confidential dataset extracted from the United States Decennial Long Form Data 2000 and a multilevel regression modeling strategy, this paper presents a case study of Chinese immigrants in the San Francisco metropolitan area. Correspondent with the highly segregated nature of the labor market as between Chinese immigrant men and women, different socioeconomic characteristics at the census tract level are significantly related to their occupational segregation. This suggests the social process of labor market segmentation is contingent on the immigrant geography of residence and workplace. With different direction and magnitude of the spatial contingency between men and women in the labor market, residency in Chinese immigrant concentrated areas is perpetuating the gender occupational segregation by skill level. Whereas abundant ethnic resources may exist in ethnic neighborhoods and enclaves for certain types of employment opportunities, these resources do not necessarily help Chinese immigrant workers, especially women, to move upward along the labor market hierarchy.
View Full
Paper PDF
-
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.
View Full
Paper PDF
-
Self-Employment Trends Among Mexican Americans
August 1990
Working Paper Number:
CES-90-09
Minority businesses are commonly aggregated into groups of 1) black, 2) Hispanic, and 3) Asian-owned firms. These analytical groupings may, in fact, be useful if blacks, Hispanics and Asians exhibit intra-group similarities and intergroup differences in terms of business development patterns. The applicable similarities and differences do appear to typify the Asian and black groups of self-employed, but they do not typify Hispanic-owned small businesses. In other words, "Hispanic" does not appear to be a useful category for analysis. The Hispanic subset, Mexican American-owned firms, is judged to be suitable for analysis. Most minority-owned firms have traditionally been started with minimal financial capital inputs by owners who have not attended college. The resultant small scale firms have frequently oriented their operations toward serving a low income minority clientele. In this study, I investigate two closely interrelated broad hypotheses on minority business dynamics, utilizing a sample of Mexican American business establishments drawn from the Characteristics of Business Owners data base: Traditional firms - these firms tend to a) be small scale, b) have high failure rates, c) and generate few jobs because of their minimal owner inputs of financial and human capital. Emerging firms, in contrast, are most commonly started by better educated owners--many of whom have attended four or more years of college--and financial capital inputs are high relative to those observed in traditional lines of business. It is because of these larger financial and human capital inputs that emerging firms tend to be a) larger scale, b) have lower failure rates, and c) generate more jobs, relative to their traditional cohorts. Sociologists have used the term "protected market" to describe the culturally-based tastes of ethnic minorities that can only be served by co-ethnic businesses. Particularly in the early years of settlement, immigrants are assumed to patronize co-ethnic enterprises, and this pattern of patronage seems to typify Hispanic enclaves in areas such as Southern California. Whether or not the resultant protected market is an asset to Mexican American firms-- particularly those in traditional fields such as small-scale retailing--is investigated econometrically. The evidence indicates that the protected market provided by immigrants patronizing co-ethnic enterprises is an absolute hindrance to Mexican American business viability. The very low incomes of most recent immigrants constrain the attractiveness of this protected market. The state of the barrio business community reflects the economic circumstances of its clientele.
View Full
Paper PDF
-
Choices of Metropolitan Destinations by the 1995-2000 New Immigrants Born in Mexico and India: Characterization and Multivariate Explanation
September 2008
Working Paper Number:
CES-08-27
Using the confidential long-form records of the 2000 population census, we study the choices of metropolitan destinations made by the Mexican-born and Indian-born immigrants who arrived in the United States in 1995-2000. Based on the application of a multinomial logit model to the data of each of these two ethnic groups, our main findings are as follows. The destination choice behaviors of both ethnic groups were in general consistent with the major theories of migration. Both groups were subject to (1) the attraction of co-ethnic communities and (2) the positive effects of wage level and total employment growth. With respect to the job increases in different wage deciles, both ethnic groups share the pattern that the less educated were subject to the pull of increase in low-wage jobs, whereas the better educated were subject to the pull of increase in high-wage jobs. With respect to the possibility of competitions against other foreignborn ethnics, both ethnic groups were found to be more prone to selecting destinations where their co-ethnics represented a relatively high proportion of the foreign-born population. The main differences in destination choice behaviors between the two ethnic groups resulted partly from the fact that the relative explanatory powers of our chosen explanatory factors differed substantially between the two ethnic groups. The Mexican-born were more subject to the attractions of (1) larger co-ethnic communities, (2) greater overall employment growth, (3) more job increases in low wage deciles, and (4) greater share of the foreign-born population by coethnics. In contrast, the Indian-born were more attracted by (1) higher wage level, and (2) more job increases in high wage deciles.
View Full
Paper PDF