Ethnic enclaves and the earnings of self-employed Latinos

Abstract

In the investigation reported here, I have tested the ethnic enclave hypothesis, focusing on self-employed Cuban and Mexican immigrants. Specifically, I have compared the economic returns for self-employed Cuban immigrants in Florida with those of Mexican immigrants in California and Texas. The analysis shows that self-employed Mexican immigrants who remain within Mexican enclaves earn substantially lower earnings than those in non-enclave environments. In contrast, the earnings of Cuban immigrants self-employed within Cuban enclaves are comparable to those earned by Cubans employed within the general labor market. Overall, my findings are contrary to the ethnic enclave hypothesis, which suggests that there are economic advantages associated with owning firms in ethnic enclaves.