How Immigration May Affect U.S. Native Entrepreneurship: Theoretical Building Blocks and Preliminary Results
AbstractThis 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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Bibliographic InfoPaper provided by Department of Economics, College of William and Mary in its series Working Papers with number 134.
Length: 31 pages
Date of creation: 17 Mar 2013
Date of revision:
immigration; innovation; entrepreneurship; human capital investment; skill transferability; opportunity cost; learning transferability;
Other versions of this item:
- Duleep, Harriet & Jaeger, David A. & Regets, Mark, 2012. "How Immigration May Affect U.S. Native Entrepreneurship: Theoretical Building Blocks and Preliminary Results," IZA Discussion Papers 6677, Institute for the Study of Labor (IZA).
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-23 (All new papers)
- NEP-ENT-2013-03-23 (Entrepreneurship)
- NEP-INO-2013-03-23 (Innovation)
- NEP-MIG-2013-03-23 (Economics of Human Migration)
- NEP-URE-2013-03-23 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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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