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

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, re...

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Bibliographic Details
Published in:The Annals of the American Academy of Political and Social Science 2007-09, Vol.613 (1), p.32-46
Main Authors: Lofstrom, Magnus, Wang, Chunbei
Format: Article
Language:English
Subjects:
Business
Business - United States
Business ownership
Business service industries
Business studies
Constraints
Construction industries
Educational attainment
Employment - Mexican Americans
Entrepreneurship
Ethnicity
Hispanic Americans
Hispanic business enterprises
Hispanic people
Hispanics
Industry
Mexican Americans
Mexicans
Minority owned businesses
Ownership
Panel data
Policy making
Retail industries
Self Employment
Self-employed workers
Start up firms
Startups
Trade and industrial education
United States - Labor sector
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Summary: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.
ISSN:0002-7162
1552-3349
DOI:10.1177/0002716207303577