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Community Determinants Of Immigrant Self-Employment: Human Capital Spillovers And Ethnic Enclaves

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  • Liliana Sousa

Abstract

I find evidence that human capital spillovers have positive effects on the proclivity of low human capital immigrants to self-employ. Human capital spillovers within an ethnic community can increase the self-employment propensity of its members by decreasing the costs associated with starting and running a business (especially, transaction costs and information costs). Immigrants who do not speak English and those with little formal education are more likely to be self-employed if they reside in an ethnic community boasting higher human capital. On the other hand, the educational attainment of co-ethnics does not appear to affect the self-employment choices of immigrants with a post-secondary education to become self-employed. Further analysis suggests that immigrants in communities with more human capital choose industries that are more capital-intensive. Overall, the results suggest that the communities in which immigrants reside influences their self-employment decisions. For low-skilled immigrants who face high costs to learning English and/or acquiring more education, these human capital spillovers may serve as an alternative resource of information and labor mobility.

Suggested Citation

  • Liliana Sousa, 2013. "Community Determinants Of Immigrant Self-Employment: Human Capital Spillovers And Ethnic Enclaves," Working Papers 13-21, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:13-21
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    File URL: https://www2.census.gov/ces/wp/2013/CES-WP-13-21.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wang, Chunchao & Zhang, Chenglei & Ni, Jinlan, 2015. "Social network, intra-network education spillover effect and rural–urban migrants' wages: Evidence from China," China Economic Review, Elsevier, vol. 35(C), pages 156-168.
    2. Joanna Nestorowicz, 2011. "Known Knowns and Known Unknowns of Immigrant Self-employment. Selected issues," Working Papers 2011-07, Faculty of Economic Sciences, University of Warsaw.

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