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Small Business Growth and Failure during the Great Recession: The Role of House Prices, Race & Gender
November 2016
Working Paper Number:
carra-2016-08
Using 2002-2011 data from the Longitudinal Business Database linked to the 2002 and 2007 Survey of Business Owners, this paper explores whether (through a collateral channel) the rise in home prices over the early 2000's and their subsequent fall associated with the Great Recession had differential impacts on business performance across owner race, ethnicity and gender. We find that the employment growth rate of minority-owned firms, particularly black and Hispanic-owned firms, is more sensitive to changes in house prices than is that of their nonminority-owned counterparts.
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Structural versus Ethnic Dimensions of Housing Segregation
March 2016
Working Paper Number:
CES-16-22
Racial residential segregation is still very high in many American cities. Some portion of segregation is attributable to socioeconomic differences across racial lines; some portion is caused by purely racial factors, such as preferences about the racial composition of one's neighborhood or discrimination in the housing market. Social scientists have had great difficulty disaggregating segregation into a portion that can be explained by interracial differences in socioeconomic characteristics (what we call structural factors) versus a portion attributable to racial and ethnic factors. What would such a measure look like? In this paper, we draw on a new source of data to develop an innovative structural segregation measure that shows the amount of segregation that would remain if we could assign households to housing units based only on non-racial socioeconomic characteristics. This inquiry provides vital building blocks for the broader enterprise of understanding and remedying housing segregation.
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Urban-Suburban Migration in the United States, 1955-2000
February 2016
Working Paper Number:
CES-16-08
This study uses census microdata from 1960 to 2010 to look at the rates of suburbanization in the 100 largest metro areas. Looking at the racial and ethnic composition of the population, and then further breaking down these groups by income, it's clear that more affluent people were more likely to move to the suburbs. Also, the White non-Hispanic population has long been the most suburbanized group. A majority of the White population lived in suburbs by 1960 in the 100 largest metro areas, while most of the Black non-Hispanic population lived in urban core areas as late as 2000. The Hispanic and Asian populations went from majority urban to majority suburban during this period.
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The Impact of Immigration on the Labor Market Outcomes of Native Workers: Evidence using Longitudinal Data from the LEHD
January 2016
Working Paper Number:
CES-16-56
Empirical estimates of the effect of immigration on native workers that rely on spatial comparisons have generally found small effects, but have been subject to the criticism that out-migration by native workers dampens the observed effect by spreading it over a larger area. In contrast, studies that rely on variation in immigration across industries, occupations, or education-based skill-levels often report large negative effects, but rely primarily on repeated cross-sectional data sets which also cannot account for the adjustment of native workers over time. In this paper, we use a newly available data set, the Longitudinal Employer Household Data (LEHD), which provides quarterly earnings records, geographic location, and firm and industry identifiers for 97% of all privately employed workers in 29 states. We use this data to analyze the impact of immigration on earnings changes and the mobility response of native workers. Overall, we find that although immigration has a negative effect on the earnings and employment of native workers, and positive effects on their firm, industry, and cross-state mobility, the overall size of the effects is small.
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WHITE-LATINO RESIDENTIAL ATTAINMENTS AND SEGREGATION
IN SIX CITIES: ASSESSING THE ROLE OF MICRO-LEVEL FACTORS
January 2016
Working Paper Number:
CES-16-51
This study examines the residential outcomes of Latinos in major metropolitan areas using new methods to connect micro-level analyses of residential attainments to overall patterns of segregation in the metropolitan area. Drawing on new formulations of standard measures of evenness, we conduct micro-level multivariate analyses using the restricted-use census microdata files to predict segregation-relevant neighborhood outcomes for individuals by race. We term the dependent variables segregation-relevant neighborhood outcomes because the differences in average outcomes for each group on these variables determine the values of the aggregate measures of evenness. This approach allows me to use standardization and components analysis to quantitatively assess the separate contributions that differences in social characteristics and differences in rates of return make towards determining the overall disparity in residential outcomes ' that is, the level of segregation ' between Whites and Latinos. Based on our micro-level residential attainment analyses we find that for Latinos, acculturation and gains in socioeconomic status are associated with greater residential contact with Whites, in agreement with spatial assimilation theory, which promotes lower segregation. However, our standardization and components analyses reveals that a substantial portion of White-Latino disparities in residential contact with Whites can be attributed to differences in rates of return; that is White-Latino differences in the ability to translate acculturation and gains in socioeconomic status into more residential contact with Whites. This is further elaborated upon by assessing the changes in contact with Whites for Whites and Latinos after manipulating single variables while holding all others constant. This can be interpreted as the role of discrimination which is emphasized by place stratification theory. Therefore we conclude that while members of minority groups make gains in residential outcomes that reduce segregation by attaining parity with Whites on social characteristics as spatial assimilation theory would predict, a substantial disparity will persist as Latinos cannot translate those gains into greater contact with Whites at the rate that Whites can. At the aggregate level of analysis, this means that White-Latino segregation remains substantial even when groups are equalized on social and economic characteristics.
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Taking the Leap: The Determinants of Entrepreneurs Hiring their First Employee
January 2016
Working Paper Number:
CES-16-48
Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of startups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a non-employer to employer firm among startups. Several interesting patterns emerge regarding the dynamics of non-employer startups hiring their first employee. Hiring rates among the universe of non-employer startups are very low, but increase when the population of non-employers is focused on more growth-oriented businesses such as incorporated and EIN businesses. If non-employer startups hire, the bulk of hiring occurs in the first few years of existence. After this point in time relatively few non-employer startups hire an employee. Focusing on more growth- and employment-oriented startups in the KFS, we find that Asian-owned and Hispanic-owned startups have higher rates of hiring their first employee than white-owned startups. Female-owned startups are roughly 10 percentage points less likely to hire their first employee by the first, second and seventh years after startup. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that non-employers hire their first employee.
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THE IMPACT OF LATINO-OWNED BUSINESS ON LOCAL ECONOMIC PERFORMANCE
January 2016
Working Paper Number:
CES-16-34
This paper takes advantage of the Michigan Census Research Data Center to merge limited-access Census Bureau data with county level information to investigate the impact of Latino-owned business (LOB) employment share on local economic performance measures, namely per capita income, employment, poverty, and population growth. Beginning with OLS and then moving to the Spatial Durbin Model, this paper shows the impact of LOB overall employment share is insignificant. When decomposed into various industries, however, LOB employment share does have a significant impact on economic performance measures. Significance varies by industry, but the results support a divide in the impact of LOB employment share in low and high-barrier industries.
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THE DYNAMICS OF LATINO-OWNED BUSINESS WITH COMPARISIONS TO OTHER ETHNICITIES
January 2016
Working Paper Number:
CES-16-33
This paper employs the Michigan Census Research Data Center to merge three limited-access Census Bureau data sets by individual firm and establishment level to investigate the factors associated with the Latino-owned Business (LOB) location and dynamics over time. The three main LOB outcomes under analysis are as follows: (1) the probability of a business being Latino-owned as opposed to a business being Asian-owned, Black-owned, or White-owned; (2) the probability of new business entry and exit; and (3) LOB employment growth. This paper then compares these factors associated with LOB with past findings on businesses that are Asian-owned, Black-owned, and White-owned. Some notable findings include: (1) only Black business owners are less associated with using personal savings as start-up capital than Latinos; (2) the only significant coefficient on start-up capital source is personal savings and it increases the odds of survival of a Latino business by 4%; (3) on average, having Puerto Rican ancestry decreases the odds of business survival; and (4) LOB are relatively likely to start a business with a small amount of capital, which, in turn, limits their future growth.
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When Race and Hispanic Origin Reporting are Discrepant Across Administrative Records and Third Party Sources: Exploring Methods to Assign Responses
December 2015
Working Paper Number:
carra-2015-08
The U.S. Census Bureau is researching uses of administrative records and third party data in survey and decennial census operations. One potential use of administrative records is to utilize these data when race and Hispanic origin responses are missing. When federal and third party administrative records are compiled, race and Hispanic origin responses are not always the same for an individual across sources. We explore different methods to assign one race and one Hispanic response when these responses are discrepant. We also describe the characteristics of individuals with matching, non-matching, and missing race and Hispanic origin data by demographic, household, and contextual variables. We find that minorities, especially Hispanics, are more likely to have non-matching Hispanic origin and race responses in administrative records and third party data compared to the 2010 Census. Minority groups and individuals ages 0-17 are more likely to have missing race or Hispanic origin data in administrative records and third party data. Larger households tend to have more missing race data in administrative records and third party data than smaller households.
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An outside view: What do observers say about others' races and Hispanic origins?
August 2015
Working Paper Number:
carra-2015-05
Outsiders' views of a person's race or Hispanic origin can impact how she sees herself, how she reports her race and Hispanic origins, and her social and economic experiences. The way outsiders describe non-strangers in terms of their race and Hispanic origin may reveal popular assumptions about which race/Hispanic categories are salient for Americans, which kinds of people are seen as multiracial, and the types of cues people use when identifying another person's race. We study patterns of observer identification using a unique, large, linked data source with two measures of a person's race and Hispanic origin. One measure (from Census 2000 or the 2010 Census) was provided by a household respondent and the other (from the other census year) was provided by a census proxy reporter (e.g., a neighbor) who responded on behalf of a non-responsive household. We ask: Does an outsider's report of a person's race and Hispanic origin match a household report? We find that in about 90% of our 3.7 million (nonrepresentative) cases, proxy reports of a person's race and Hispanic origin match responses given by the household in a different census year. Match rates are high for the largest groups: non-Hispanic whites, blacks, and Asians and for Hispanics, though proxies are not very able to replicate the race responses of Hispanics. Matches are much less common for people in smaller groups (American Indian/Alaska Native, Pacific Islander, Some Other Race, and multiracial). We also ask: What predicts a matched response and what predicts a particular unmatched response? We find evidence of the persistence of hypodescent for blacks and hyperdescent for American Indians. Biracial Asian-whites and Pacific Islander-whites are more often seen by others as non-Hispanic white than as people of color. Proxy reporters tend to identify children as multiple race and elders as single race, whether they are or not. The race/Hispanic composition of the tract is more powerfully predictive of a particular unmatched response than are tract-level measures of socioeconomic status; unmatched responses are often consistent with the race/Hispanic characteristics of the neighborhood.
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