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Do enclaves matter in immigrants’ self-employment decision?

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  • Maude Toussaint-Comeau
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    Abstract

    This paper uses 2000 U.S. Census data to study the determinants of self-employment decisions among immigrants. It outlines a theoretical framework for analyzing the role of ethnic enclaves in the self-employment decision of immigrants that captures nuances involved in the interaction between ethnic enclaves and different ethnic groups. It assesses the effect of ethnic enclaves for different groups and explores explanations for differences. The results show that higher ethnic concentration in metropolitan areas is positively related to the probability of self-employment of immigrants. However, the significance of ethnic concentration for self-employment differs by the country or region of origin of immigrants. The relationship between location and self-employment probability of immigrants is reinforced by other metropolitan area-specific characteristics that include labor market factors, such as the unemployment rate, the self-employment rate, the monetary returns to self-employment relative to wage employment, and the success of self-employed co-ethnic members.

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    File URL: http://www.chicagofed.org/digital_assets/publications/working_papers/2005/wp2005_23.pdf
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    Bibliographic Info

    Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-05-23.

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    Date of creation: 2005
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    Handle: RePEc:fip:fedhwp:wp-05-23

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    Keywords: Immigrants ; Self-employed;

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    References

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    1. Chiswick, Barry R. & Miller, Paul W., 2002. "Do Enclaves Matter in Immigrant Adjustment?," IZA Discussion Papers 449, Institute for the Study of Labor (IZA).
    2. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September.
    3. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November.
    4. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
    5. Magnus Lofstrom, 2002. "Labor market assimilation and the self-employment decision of immigrant entrepreneurs," Journal of Population Economics, Springer, vol. 15(1), pages 83-114.
    6. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-91, October.
    7. Fairlie, Robert W. & Woodruff, Christopher, 2008. "Mexican-American Entrepreneurship," IZA Discussion Papers 3488, Institute for the Study of Labor (IZA).
    8. Philip Bond & Robert Townsend, 1996. "Formal and informal financing in a Chicago neighborhood," Economic Perspectives, Federal Reserve Bank of Chicago, issue Jul, pages 3-27.
    9. Razin, Eran, 1990. "Immigrant Entrepreneurs in Israel, Canada and California," Institute for Social Science Research, Working Paper Series qt21f995xx, Institute for Social Science Research, UCLA.
    10. Fairlie, Robert, 2014. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Santa Cruz Department of Economics, Working Paper Series qt24p7v6gc, Department of Economics, UC Santa Cruz.
    11. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September.
    12. Chrystell Flota & Marie T. Mora, 2001. "The earnings of self-employed Mexican Americans along the U.S.-Mexico border," The Annals of Regional Science, Springer, vol. 35(3), pages 483-499.
    13. Walter S. McManus, 1990. "Labor Market Effects of Language Enclaves: Hispanic Men in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 25(2), pages 228-252.
    14. de Wit, Gerrit, 1993. " Models of Self-Employment in a Competitive Market," Journal of Economic Surveys, Wiley Blackwell, vol. 7(4), pages 367-97, December.
    15. Geoffrey Carliner, 1995. "The Language Ability of U.S. Immigrants: Assimilation and Cohort Effects," NBER Working Papers 5222, National Bureau of Economic Research, Inc.
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