Prosperity-Pull or Recession-Push?: Mexican Immigrant Self-Employment Across the Business Cycle

44 Pages Posted: 9 Jan 2017

See all articles by Peter Catron

Peter Catron

University of California, Los Angeles (UCLA) - Department of Sociology

Date Written: January 5, 2017

Abstract

Immigrant populations may either be pulled into self-employment by the lure of high wages relative to wage and salary work, or they may be pushed into self-employment as a survival mechanism in the face of unemployment. Research that focuses on Mexican immigrant self-employment in the United States tends to stress the prosperity-pull hypothesis and pay little attention to recession-push hypotheses. The focus of this article is to understand the extent that Mexican immigrants enter self-employment as a response to unemployment. Using a unique panel dataset that captures fast-paced labor market changes over the 1994 to 2013 period, I find that Mexican immigrants – and Mexican immigrant men in particular – are more likely to become self-employed in economically bad times than native workers and less likely to become self-employed than native workers in good times. The threshold where Mexican immigrants have a higher rather than lower probability to become self-employed is at eight percent unemployment. These results filter throughout various subcategories and are consistent with recession-push hypotheses.

Suggested Citation

Catron, Peter, Prosperity-Pull or Recession-Push?: Mexican Immigrant Self-Employment Across the Business Cycle (January 5, 2017). Available at SSRN: https://ssrn.com/abstract=2894473 or http://dx.doi.org/10.2139/ssrn.2894473

Peter Catron (Contact Author)

University of California, Los Angeles (UCLA) - Department of Sociology ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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