“Misfits,” “stars,” and immigrant entrepreneurship
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Prior research has shown that immigrants are more likely than natives to become entrepreneurs, and that entrepreneurs are disproportionately drawn from the extremes of the ability distribution. Using a large panel of US residents with bachelors’ degrees in scientific fields, we ask whether higher rates of entrepreneurship among immigrants can be explained by their position on the ability spectrum and establish four new facts about science-based and immigrant entrepreneurship. First, in this sample, an immigrant entrepreneurship premium exists only in science-based entrepreneurship. Second, this premium persists after controlling for ability (measured by paid employment wage residuals.) Third, a U-shaped relationship between ability and entrepreneurship exists only in non-science entrepreneurship; for science entrepreneurship, the relationship is increasing. Finally, the immigrant premium in science entrepreneurship is largest among immigrants with non-US degrees and those from non-English-speaking or culturally dissimilar countries. Stated preferences for self-employment do not explain the immigrant premium. The results suggest that immigrants may on average have higher levels of unobservable skills related to entrepreneurship.
KeywordsImmigration High-skilled immigrants Entrepreneurship Science entrepreneurship
JEL codesJ24 J61 J82
This project was funded by National Science Foundation Grant SBE-0738371. We thank Donna Ginther who gave invaluable assistance with the dataset construction and the definition of entrepreneurship. We also thank Meg Blume-Kohout, TszKin Julian Chan, Jed DeVaro, Robert Fairlie, Dilip Mookherjee, Daniele Paserman, Claudia Olivetti, conference participants at the 2011 Southern Economic Association Annual meeting, and the participants and attendees at the 2012 SOLE session “The Economics of Science” for their helpful comments. A previous version of this paper was part of Giulia La Mattina’s Ph.D. dissertation at Boston University.
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