Ethnic group size, linguistic isolation, and immigrant entrepreneurship in the USA

Abstract

Using a sample of immigrant men in US census data from the early and late 1900s and available in the Integrated Public Use Microdata Series (IPUMS), this study explores: (1) whether immigrant entrepreneurship is positively affected by ethnic group size and linguistic isolation; (2) how sensitive these relationships are to English-language proficiency; and (3) if these relationships have remained stable over time. The empirical results indicate that the size of the local ethnic population does not enhance immigrant self-employment for either English-proficient or limited-English-proficient (LEP) men in the USA. In addition, while linguistic isolation in the local labour pool seems to promote entrepreneurship among English-fluent immigrants in certain cases, it appears to hinder business formation among the LEP. Finally, comparing the results across time-periods is consistent with the premise that rising xenophobia pushes a disproportionate share of the LEP into self-employment.