Immigration Policy and the Rise of Self-Employment Among Mexican Immigrants

65 Pages Posted: 14 Dec 2020

See all articles by Catalina Amuedo-Dorantes

Catalina Amuedo-Dorantes

San Diego State University - Department of Economics; IZA Institute of Labor Economics

Magnus Lofstrom

Public Policy Institute of California

Chunbei Wang

University of Texas at Dallas

Abstract

Over the past two decades, the U.S. has seen a drastic growth in self-employment among Mexican immigrants, the largest immigrant population in the country. This is an interesting yet puzzling trend, in stark contrast to the stagnated growth of self-employment among other disadvantaged minority groups such as blacks and even a significant decline among whites. Little is known of what drives that growth. We propose that the expansion of interior immigration enforcement, a characteristic of the U.S. immigration policy during that time span, might have contributed to this unique trend by pushing Mexican immigrants into self-employment as an alternative livelihood. Exploiting temporal and geographic variation in immigration enforcement measures from 2005 to 2017, we show that tougher enforcement has been responsible for 10 to 20 percent of the rise in Mexican self-employment. The impact mainly concentrates among likely undocumented immigrants. It is mainly driven by police-based enforcement measures responsible for most deportations, as opposed to employment-based enforcement. Our results suggest that apprehension fear, instead of lack of employment opportunities, is the main push factor.

JEL Classification: J15, J23, K37

Suggested Citation

Amuedo-Dorantes, Catalina and Lofstrom, Magnus and Wang, Chunbei, Immigration Policy and the Rise of Self-Employment Among Mexican Immigrants. IZA Discussion Paper No. 13930, Available at SSRN: https://ssrn.com/abstract=3747448 or http://dx.doi.org/10.2139/ssrn.3747448

Catalina Amuedo-Dorantes (Contact Author)

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States
619-594-1663 (Phone)
619-594-5062 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Magnus Lofstrom

Public Policy Institute of California

500 Washington Street
Suite 800
San Francisco, CA 94111
United States

Chunbei Wang

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083

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