Mexican-American self-employment: a dynamic analysis of business ownership

This paper analyzes causes of the low self-employment rate among Mexican-Americans by studying self-employment entry and exits utilizing panel data from the Survey of Income and Program Participation (SIPP). Our results indicate that differences in education and financial wealth are important factors in explaining differences in entrepreneurship across groups. Importantly, we analyze self-employment by recognizing heterogeneity in business ownership across industries and show that a classification of firms by human and financial capital intensiveness, or entry barriers, is effective in explaining differences in entrepreneurship across ethnic groups.