Immigrant Self-Employment: The Family as Social Capital and the Value of Human Capital

We examine how self-employment among Asian and Hispanic immigrants is affected by family composition and human capital/class resources. Because of collective interests and strong personal ties the family facilitates the pooling of labor power and financial resources. Enterprising immigrants draw on these resources when establishing and operating small businesses. Our findings also show the importance of human capital/class resources in accounting for immigrant self-employment. Although foreign-earned human capital is usually not highly valued in the host labor market immigrants successfully use this human capital to achieve business ownership. Interethnic variation in personal human capital and family composition accounts for a substantial portion of the observed interethnic variation in self-employment....The data are drawn from the 1980 five percent PUMS for greater New York City and Los Angeles.... (EXCERPT)