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How Immigration May Affect U.S. Native Entrepreneurship: Theoretical Building Blocks and Preliminary Results

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Author Info

  • Harriet Orcutt Duleep

    ()
    (Thomas Jefferson Program in Public Policy, The College of William and Mary)

  • David Jaeger

    ()
    (Program in Economics, Graduate Center of the City University of New York)

  • Mark C. Regets

    ()
    (National Science Foundation)

Abstract

This paper describes the theoretical underpinnings and provides empirical evidence for a model that predicts a positive impact of immigration on entrepreneurial activity. Immigrants, we hypothesize, facilitate innovation and entrepreneurship by being willing and able to invest in new skills. At the heart of this theoretical prediction is the observation that human capital not immediately valued in the U.S. labor market is useful for learning new skills. Because immigrants face a lower opportunity cost of investing in new skills or methods, this “transfer” of source-specific skills to the U.S. may lead immigrants to be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants (even if they are not self-employed) may prove to be areas in which entrepreneurship and innovation are easier to accomplish. Our theory offers a unique perspective on the contributions of immigrants to economic development beyond traditional perspectives that focus on low-cost immigrant labor or immigrant entrepreneurship.

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File URL: http://economics.wm.edu/wp/cwm_wp134.pdf
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Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 134.

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Length: 31 pages
Date of creation: 17 Mar 2013
Date of revision:
Handle: RePEc:cwm:wpaper:134

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Related research

Keywords: immigration; innovation; entrepreneurship; human capital investment; skill transferability; opportunity cost; learning transferability;

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References

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  1. Harriet Duleep & Mark Regets, 1997. "Measuring immigrant wage growth using matched CPS files," Demography, Springer, vol. 34(2), pages 239-249, May.
  2. Timothy Bates, 1993. "Determinants Of Survival And Profiability Among Asian Immigrant-Owned Small Businesses," Working Papers 93-11, Center for Economic Studies, U.S. Census Bureau.
  3. Green, David A, 1999. "Immigrant Occupational Attainment: Assimilation and Mobility over Time," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 49-79, January.
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Cited by:
  1. Dr Max Nathan, 2013. "The Wider Economic Impacts Of High-Skilled Migrants: A Survey Of The Literature," NIESR Discussion Papers 11607, National Institute of Economic and Social Research.

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