Working Paper: NBER ID: w21597
Authors: William R. Kerr; Martin Mandorff
Abstract: We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more concentrated in self-employment for dry cleaning than other immigrant groups, and Gujarati-speaking Indians are 84 times more concentrated in managing motels. We quantify that smaller and more socially isolated ethnic groups display higher rates of entrepreneurial concentration. This is consistent with a model of social interactions where nonwork relationships facilitate the acquisition of sector-specific skills and result in occupational stratification along ethnic lines via concentrated entrepreneurship.
Keywords: entrepreneurship; ethnicity; social networks; immigration
JEL Codes: D21; D22; D85; F22; J15; L14; L26; M13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| smaller and more socially isolated ethnic groups (J15) | higher rates of entrepreneurial concentration (L26) |
| one standard deviation decrease in group size (C92) | 0.58 standard deviation increase in average entrepreneurial concentration (L26) |
| one standard deviation increase in in-marriage rates (J12) | 0.33 standard deviation increase in average entrepreneurial concentration (L26) |