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Mexican Entrepreneurship: A Comparison of Self-Employment in Mexico and the United States

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  • Robert Fairlie
  • Christopher Woodruff

Abstract

Nearly a quarter of Mexico's workforce is self employed. But in the U.S. rates of self employment among Mexican Americans are only 6 percent, about half the rate among non-Latino whites. Using data from the Mexican and U.S. population census, we show that neither industrial composition nor differences in the age and education of Mexican born populations residing in Mexico and the U.S. accounts for the differences in the self employment rates in the two countries. Within the U.S., however, the data show self employment rates are much higher in ethnic enclaves. In PUMAS with a high percentage of residents of Latino origin, rates of self employment are comparable to rates among non-Latino whites. The data also indicate that the lack of English language ability and the lack of legal status among Mexican American immigrants helps account for their lower rates of self employment.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11527.

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Date of creation: Aug 2005
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Publication status: published as Mexican Entrepreneurship: A Comparison of Self-Employment in Mexico and the United States , Robert W. Fairlie, Christopher Woodruff. in Mexican Immigration to the United States , Borjas. 2007
Handle: RePEc:nbr:nberwo:11527

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  1. Antonio Spilimbergo & Gordon H. Hanson, 1999. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," American Economic Review, American Economic Association, vol. 89(5), pages 1337-1357, December.
  2. Andrew M. Yuengert, 1995. "Testing Hypotheses of Immigrant Self-Employment," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 194-204.
  3. Daniel Chiquiar & Gordon H. Hanson, 2002. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," NBER Working Papers 9242, National Bureau of Economic Research, Inc.
  4. Robert Fairlie & Alicia Robb, 2005. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," Working Papers 05-07, Center for Economic Studies, U.S. Census Bureau.
  5. Douglas Gollin, 2001. "Nobody's Business but My Own: Self Employment and Small Enterprise in Economic Development," Center for Development Economics 172, Department of Economics, Williams College.
  6. Robert W. Fairlie & Bruce D. Meyer, . "The Effect of Immigration on Native Self-Employment," IPR working papers 00-2, Institute for Policy Resarch at Northwestern University.
  7. Bernard F. Lentz & David N. Laband, 1990. "Entrepreneurial Success and Occupational Inheritance among Proprietors," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 563-79, August.
  8. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  9. Fairlie, Robert, 2014. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt49c4n0fg, Department of Economics, UC Santa Cruz.
  10. Holtz-Eakin, Douglas & Rosen, Harvey S & Weathers, Robert, 2000. " Horatio Alger Meets the Mobility Tables," Small Business Economics, Springer, vol. 14(4), pages 243-74, June.
  11. 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.
  12. Michael Hout & Harvey S. Rosen, 1999. "Self-Employment, Family Background, and Race," NBER Working Papers 7344, National Bureau of Economic Research, Inc.
  13. Christian Dustmann & Arthur Van Soest, 2002. "Language and the earnings of immigrants," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(3), pages 473-492, April.
  14. Sherrie A. Kossoudji & Deborah A. Cobb-Clark, 2002. "Coming out of the Shadows: Learning about Legal Status and Wages from the Legalized Population," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 598-628, July.
  15. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
  16. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-30, April.
  17. Hoyt Bleakley & Aimee Chin, 2004. "Language Skills and Earnings: Evidence from Childhood Immigrants," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 481-496, May.
  18. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
  19. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
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Cited by:
  1. Lofstrom, Magnus & Bates, Timothy, 2009. "Latina Entrepreneurship," IZA Discussion Papers 3997, Institute for the Study of Labor (IZA).
  2. Saima Bashir & Tesfa Gebremedhin & Jerald Fletcher, 2011. "An Analysis of the Role of Self-Employment in the Economic Development of the Rural Northeastern United States," Working Papers 201105, Regional Research Institute, West Virginia University.

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