The income consequences of ethnic entrepreneurial concentrations

Based on the 1990 census data for America’s 16 largest metropolitan regions, this study assesses the propensities of immigrants and minorities to become self-employed and concentrate in particular niches in different metropolitan regions in relation to earnings. Massive gravitation of nonmainstream groups into self-employment was found to be associated with a low earnings advantage of self-employment, particularly where the self-employed concentrated in a few low-income traditional niches. These niches, however, could still contribute to the economic progress of immigrants and were particularly attractive for less-educated males. High earnings advantage of self-employment, associated with high rates of self-employment, characterized several large communities located in the largest metropolitan regions, where immigrant entrepreneurs expanded from traditional specializations into a broader range of entrepreneurial niches.