Social Networks, Ethnicity, and Entrepreneurship
61 Pages Posted: 28 Sep 2015 Last revised: 30 Oct 2015
Date Written: September 2015
We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more concentrated in self employment for dry cleaning than other immigrant groups, and Gujarati-speaking Indians are 108 times more concentrated in managing motels. We quantify that smaller and more socially isolated ethnic groups display higher rates of entrepreneurial concentration. This is consistent with a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills and result in occupational stratification along ethnic lines via concentrated entrepreneurship.
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