ESSAYS ON IMMIGRANT ENTREPRENEURSHIP

This dissertation consists of two essays on immigrant entrepreneurship. In the first essay I examine the question "Are immigrants more entrepreneurial than natives?" While previous papers have equated self-employment with entrepreneurship, in this essay I make the important distinction between entrepreneurs and other self-employed individuals based on incorporation status. Similar to what has been found by Levine and Rubinstein (2017), I find that incorporated self-employed immigrants have much higher levels of education and higher earnings compared to unincorporated self-employed and wage earner immigrants. These patterns suggest that it is useful to distinguish between the two types of self-employed even among immigrants. Making this distinction, I find that immigrants are more likely than natives to be incorporated self-employed. I also find that it takes time for immigrants to catch-up and surpass natives, and there is an important process of entrepreneurial assimilation. Immigrants start below natives when they first arrive but catch up to natives in approximately 10 years. Finally, second generation immigrants are even more likely than first generation immigrants to be incorporated business owners. In the second chapter I investigate the role of shocks to collateral and access to capital in accounting for this assimilation process. Using panel data constructed from March CPS I examine entry into entrepreneurship from wage employment and find evidence that collateral constraints are more important for immigrants than natives. I estimate the effect of an exogenous increase to collateral on entry into incorporation using a difference-in-differences estimation strategy, comparing across home owners and renters in states which experienced larger and smaller increases in home prices. Exogenous shocks to collateral have a positive effect on entry into entrepreneurship for immigrants but not so much for natives. In summary, this dissertation explores the entrepreneurship of immigrants relative to natives then investigates possible methods to entry into entrepreneurship in the United States.