Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149298
Authors: 
Kerr, William R.
Mandorff, Martin
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6211
Abstract: 
We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, the concentration of Korean self-employment in dry cleaners is 34 times greater than other immigrant groups, and Gujarati-speaking Indians are similarly 108 times more concentrated in managing motels. We develop a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent with the reoccurring phenomenon of small, socially-isolated groups achieving considerable economic success via concentrated entrepreneurship. Empirical evidence from the United States supports our model’s underlying mechanisms.
Subjects: 
entrepreneurship
self-employed
occupation
ethnicity
immigration
networks
JEL: 
L26
D21
D22
D85
F22
J15
L14
M13
Document Type: 
Working Paper

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