Mexican-Hispanic Self-Employment Entry: The Role of Business Start-Up Constraints

Magnus Lofstrom and Chunbei Wang

The ANNALS of the American Academy of Political and Social Science, 2007, vol. 613, issue 1, 32-46

Abstract: This article examines causes of the low self-employment rates among Mexican-Hispanics by studying self-employment entry using the 1996 panel of the Survey of Income and Program Participation (SIPP). The data show that Mexican-Hispanics are less likely to be self-employed or enter self-employment, relative to non-Hispanic whites. The authors analyze self-employment by recognizing heterogeneity in business ownership across industries and show that a classification of firms by human and financial capital “intensiveness,†or entry barriers, is effective in explaining differences in entrepreneurship across ethnic groups. The authors show that the lower self-employment entry rates among Mexican-Hispanics are due to lower entry rates into business ownership of firms in relatively high-barrier industries. In fact, Hispanics are more likely to start up a business in a low-barrier industry than whites.

Keywords: self-employment; entrepreneurship; Hispanic (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:613:y:2007:i:1:p:32-46

DOI: 10.1177/0002716207303577

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