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The effect of culture on self-employment

  • Marcén, Miriam

This work examines the effect of cultural differences on self-employment. All the individuals considered in the analysis are second-generation immigrants who were born and live under the same laws and institutions in the US. Following an epidemiological approach, the variation in self-employment rates by ancestors’ national origin can be considered as supporting evidence of the effect of culture on self-employment. Our results show that culture has quantitatively significant effects on self-employment. This finding is robust to alternative specifications and to the introduction of several controls. Additional analysis shows that there are differences in the impact of culture on self-employment by gender, in that men are more sensitive than women to culture; and by economic activity, in that those individuals involved in professional, scientific, and technical activities, and those in accommodation and food service activities, are more affected by the impact of cultural differences. We also examine the transmission of culture, observing an important role of the inter-generational transfer of culture, although the impact of culture on self-employment diminishes from generation to generation.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 47338.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:47338
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  1. Holtz-Eakin, D. & Joulfaian, D. & Rosen, H.S., 1992. "Entrepreneurial Decisions and Liquidity Constraints," Papers 129, Princeton, Department of Economics - Financial Research Center.
  2. Paola Giuliano, 2005. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," 2005 Meeting Papers 189, Society for Economic Dynamics.
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  4. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
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  8. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
  9. Christopher D. Carroll & Byung-Kun Rhee & Changyong Rhee, 1994. "Are There Cultural Effects on Saving? Some Cross-Sectional Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 685-699.
  10. Herb J. Schuetze, . "Taxes, Economic Conditions And Recent Trends in Male Self-Employment: A Canada-U.S. Comparison," Canadian International Labour Network Working Papers 11, McMaster University.
  11. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 1019-1055.
  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. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  14. Cowling, Marc & Taylor, Mark, 2001. "Entrepreneurial Women and Men: Two Different Species?," Small Business Economics, Springer, vol. 16(3), pages 167-75, May.
  15. Furtado, Delia & Marcén, Miriam & Sevilla, Almudena, 2011. "Does Culture Affect Divorce Decisions? Evidence from European Immigrants in the US," IZA Discussion Papers 5960, Institute for the Study of Labor (IZA).
  16. Henrekson, Magnus & Du Rietz, Anita, 1999. "Testing the Female Underperformance Hypothesis," Working Paper Series 521, Research Institute of Industrial Economics.
  17. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, vol. 7(4), pages 409-426, July.
  18. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993. "Sticking it Out: Entrepreneurial Survival and Liquidity Constraints," NBER Working Papers 4494, National Bureau of Economic Research, Inc.
  19. Steven J. Davis & John Haltiwanger & Scott Schuh, 1993. "Small Business and Job Creation: Dissecting the Myth and Reassessing theFacts," NBER Working Papers 4492, National Bureau of Economic Research, Inc.
  20. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  21. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  22. Magnus Lofstrom, 2002. "Labor market assimilation and the self-employment decision of immigrant entrepreneurs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 83-114.
  23. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-66, May.
  24. 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.
  25. Marcén, Miriam & Bellido, Héctor, 2013. "Teen Mothers and Culture," MPRA Paper 44712, University Library of Munich, Germany.
  26. Verheul, Ingrid & Thurik, Roy & Grilo, Isabel & van der Zwan, Peter, 2012. "Explaining preferences and actual involvement in self-employment: Gender and the entrepreneurial personality," Journal of Economic Psychology, Elsevier, vol. 33(2), pages 325-341.
  27. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  28. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
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