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Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States

Author

Listed:
  • Lee, Jun Yeong

    (Iowa State University)

  • Winters, John V.

    (Iowa State University)

Abstract

Immigrant entrepreneurs are critical to regional and national economies. Immigrants in the USA have higher self-employment rates than natives, and immigrants have made outsized contributions as founders of numerous highly successful firms. However, we document that immigrant self-employment rates vary considerably across areas of the USA. Our main measure is the percentage of immigrant workers in an area who are self-employed; i.e., the self- employment rate for the foreign-born. Areas with colder winter temperatures have especially low self-employment rates among their immigrant populations compared to other areas of the USA. This relationship holds for numerous sub-samples of immigrants and is not driven by any particular group. The relationship persists after controlling for numerous individual and local area characteristics. Immigrant entrepreneurs appear to be especially forward-looking and responsive to warmer January temperature as a locational amenity. The results have important implications about the location choices of immigrant entrepreneurs.

Suggested Citation

  • Lee, Jun Yeong & Winters, John V., 2021. "Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States," IZA Discussion Papers 14941, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp14941
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    Cited by:

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    2. Li, Mengjie & Bai, Qianwen & Du, Weijian, 2025. "The world is different because of you: Global warming, technological progress and economic development," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 202-211.

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    Keywords

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    JEL classification:

    • 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
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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