Do Enclaves Matter in Immigrants' Self-Employment Decision?

This paper uses 2000 U.S. Census data to study the determinants of self-employment decisions among immigrants. It outlines a theoretical framework for analyzing the role of ethnic enclaves in the self-employment decision of immigrants that captures nuances involved in the interaction between ethnic enclaves and different ethnic groups. It assesses the effect of ethnic enclaves for different groups and explores explanations for differences. The results show that higher ethnic concentration in metropolitan areas is positively related to the probability of selfemployment of immigrants. However, the significance of ethnic concentration for selfemployment differs by the country or region of origin of immigrants. The relationship between location and self-employment probability of immigrants is reinforced by other metropolitan areaspecific characteristics that include labor market factors, such as the unemployment rate, the selfemployment rate, the monetary returns to self-employment relative to wage employment, and the success of self-employed co-ethnic members.