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

  • Robert Fairlie
  • Christopher Woodruff

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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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
Note: ITI LS
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  1. Fairlie, Robert W. & Robb, Alicia, 2004. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," IZA Discussion Papers 1296, Institute for the Study of Labor (IZA).
  2. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
  3. Dustmann, Christian & van Soest, Arthur, 1998. "Language and the Earnings of Immigrants," CEPR Discussion Papers 2012, C.E.P.R. Discussion Papers.
  4. Douglas Holtz-Eakin & Harvey S. Rosen & Robert Weathers, 2000. "Horatio Alger Meets the Mobility Tables," NBER Working Papers 7619, National Bureau of Economic Research, Inc.
  5. 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.
  6. Gordon H. Hanson & Antonio Spilimbergo, 1996. "Illegal Immigration, Border Enforcement, and Relative Wages: Evidence from Apprehensions at the U.S.-Mexico Border," NBER Working Papers 5592, National Bureau of Economic Research, Inc.
  7. 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.
  8. Fairlie, Robert, 2014. "The Effect of Immigration on Native Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt7bq2h9rh, Department of Economics, UC Santa Cruz.
  9. Michael Hout & Harvey S. Rosen, 1999. "Self-Employment, Family Background, and Race," NBER Working Papers 7344, National Bureau of Economic Research, Inc.
  10. Kossoudji, S.A. & Cobb-Clark, D.A., 1996. "Coming Out of the Shadows: Learning About Legal Status and Wages from the Legalized Population," CEPR Discussion Papers 347, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  11. Fairlie, Robert W, 1999. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 80-108, January.
  12. Andrew M. Yuengert, 1995. "Testing Hypotheses of Immigrant Self-Employment," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 194-204.
  13. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
  14. Gollin, Douglas, 2008. "Nobody's business but my own: Self-employment and small enterprise in economic development," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 219-233, March.
  15. 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.
  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. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
  18. 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.
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