Working Paper: NBER ID: w28509
Authors: Sari Pekkala Kerr; William R. Kerr
Abstract: We explore co-ethnic hiring among new ventures using U.S. administrative data. Co-ethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging from <2% to >40%. Co-ethnic hiring grows with the size of the local ethnic workforce, greater linguistic distance to English, lower cultural/genetic similarity to U.S. natives, and in harsher policy environments for immigrants. Co-ethnic hiring is remarkably persistent for ventures and for individuals. Co-ethnic hiring is associated with greater venture survival and growth when thick local ethnic employment surrounds the business. Our results are consistent with a blend of hiring due to information advantages within ethnic groups with some taste-based hiring.
Keywords: coethnic hiring; immigration; entrepreneurship; venture performance; ethnic diversity
JEL Codes: F22; J15; J44; J61; J62; J71; L26; M13; M51; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local ethnic workforce size (R23) | coethnic hiring (J15) |
| coethnic hiring (J15) | venture survival (Q26) |
| coethnic hiring (J15) | venture growth (O00) |
| local ethnic workforce size (R23) | venture survival (Q26) |
| local ethnic workforce size (R23) | venture growth (O00) |
| linguistic distance to English (Y80) | coethnic hiring (J15) |
| cultural similarity to US natives (Z10) | coethnic hiring (J15) |
| coethnic hiring (J15) | negative employment growth (J63) |