Abstract
AbstractUsing nationally representative data from the United States, the author estimates the causal impact of immigrant entrepreneurship on entrepreneurial propensities of natives. The author draws data from the Annual Social and Economic Supplement of the Current Population Survey and uses within-state variation in supply of immigrant entrepreneurs for identification. To address concerns of endogeneity in the supply of immigrant entrepreneurs, the author takes advantage of a quasi-experiment provided by the State Children's Health Insurance Program. While the Ordinary Least Squares estimates indicate a positive effect, the Two Stage Least Squares estimates suggest that, on average, there is no significant effect of immigrant entrepreneurs on native entrepreneurship. Moreover, there is no net effect on subgroups of natives separated by skill level. There is also some evidence that immigrant entrepreneurs may “crowd-in” Blacks into certain types of self-employment. These results are in contrast to the significant negative impact suggested by the previous literature.
Highlights
Immigrant entrepreneurs play an important social and economic role in economies around the world
While the data for incorporated self-employment are quite noisy, the post State Children’s Health Insurance Program (SCHIP) bump in immigrant entrepreneurs is clear in the case of all types and more so in the case of unincorporated type
Exact nature and magnitude of this effect has important implications for the discourse related to the impact of immigration on welfare of natives and on the national and local policies for entrepreneurship development
Summary
Immigrant entrepreneurs play an important social and economic role in economies around the world. Immigrant entrepreneurs increase demand for intermediate goods and services, stimulate technological innovation (Duleep et al, 2012), aid in cross-border technology diffusion (Kerr, 2008), and facilitate international trade (Gould, 1994). These effects are likely to help in growth of native-owned businesses (Coad and Rao, 2008) and encourage more natives to take up entrepreneurship (the “crowding in” effect). This paper is related to the vast literature, across disciplines, on socio-economic impacts of immigration Most previous studies, both theoretical and empirical, on the topic examine the impact of immigrant workers on wages and employment prospects of native workers. Better skill mix, and high rate of entrepreneurship among immigrants are some of the benefits of immigration highlighted in these studies.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
