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Ethnic Enclaves and Immigrant Self-employment: A Neighborhood Analysis of Enclave Size and Quality

Author

Listed:
  • Andersson, Martin

    (Blekinge Institute of Technology)

  • Larsson, Johan P.

    (Swedish Entrepreneurship Forum)

  • Öner, Özge

    (Research Institute of Industrial Economics (IFN))

Abstract

We explore the effects of neighborhood-level ethnic enclaves on the propensity of immigrants to use business ownership as a vehicle to transcend from labor market outsiders to insiders. We exploit an exogenously partitioned grid of geocoded 1–by–1 km squares to approximate neighborhoods, and match it with Swedish full-population data from 2011–2012 to study immigrants from the Middle East. We demonstrate a robust tendency for people to leave non-employment for self-employment if many members of the neighborhood ethnic diaspora are business owners, while we observe weak effects emanating from business ownership in other groups. Net of these effects, the overall scale of the enclave, measured by local concentration of co-ethnic peers, negatively influences the propensity to become self-employed. The results are consistent with the argument that it is not the scale, but the quality of local ethnic enclaves that influence labor market outcomes for immigrants.

Suggested Citation

  • Andersson, Martin & Larsson, Johan P. & Öner, Özge, 2017. "Ethnic Enclaves and Immigrant Self-employment: A Neighborhood Analysis of Enclave Size and Quality," Working Paper Series 1195, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1195
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    Citations

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    Cited by:

    1. Arturs Kalnins & Michele Williams, 2021. "The geography of female small business survivorship: Examining the roles of proportional representation and stakeholders," Strategic Management Journal, Wiley Blackwell, vol. 42(7), pages 1247-1274, July.
    2. Johan Klaesson & Özge Öner & Dieter Pennerstorfer, 2021. "Getting the first job: Size and quality of ethnic enclaves and refugee labor market entry," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 112-139, January.
    3. Öner, Özge & Klaesson, Johan, 2018. "Getting the First Job – Size and Quality of Ethnic Enclaves for Refugee Labor Market Entry," Working Paper Series 1256, Research Institute of Industrial Economics.
    4. David B. Audretsch & Maksim Belitski & Georg Eichler, 2021. "Bilingualism and in cross-border entrepreneurship," Revista de Economía Laboral - Spanish Journal of Labour Economics, Asociación Española de Economía Laboral - AEET, vol. 18, pages 14-29.
    5. David B. Audretsch & Maksim Belitski & Georg Eichler, 2020. "Bilingualism and regional entrepreneurship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 787-806, December.
    6. Öner, Özge & Klaesson, Johan, 2018. "Ethnic Enclaves and Labor Market Outcomes – What Matters Most: Neighborhood, City or Region?," Working Paper Series 1251, Research Institute of Industrial Economics.
    7. Johan Klaesson & Özge Öner, 2021. "Ethnic enclaves and segregation—self-employment and employment patterns among forced migrants," Small Business Economics, Springer, vol. 56(3), pages 985-1006, February.

    More about this item

    Keywords

    Ethnic enclave; Segregation; Immigrant entrepreneurship; Self-employment; Labor market sorting; Integration;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

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