Self-Employment Concentration and Earnings among Mexican Immigrants in the U.S.

Abstract

Recent research has assessed the implications of entrepreneurship for immigrant incorporation by examining the hypothesis that self-employed immigrants earn higher incomes than other immigrant workers in the labor market. With the important exception of several pioneering ethnographic and case studies, however, little attention has been paid in the literature to whether immigrants who are not self-employed derive any income benefit from the activities of immigrants in their communities who have gone into business for themselves. In this article, we draw upon the ethnic entrepreneurship and urban ecological literatures to develop a hypothesis about how the relative size of the local ethnic market conditions the extent to which interurban variation in the self-employment rate of Mexican immigrants will influence the incomes of Mexican immigrants who are not self-employed. Further, we use data from the 1990 U.S. Census of Population and Housing to investigate this hypothesis for Mexican immigrants residing in sixty U.S. metropolitan statistical areas. Results from the analyses indicate that the effects of variation in levels of self-employment depend upon the relative size of the local ethnic market: among cities with smaller ethnic markets, higher concentrations of self-employment are related to lower Mexican-immigrant eamings, while among cities with larger ethnic markets, higher concentrations of self-employment are related to small increases in wages