Mexican Immigrant Self-Employment across the Business Cycle, 1994-2013

Peter Catron, University of California, Los Angeles

Analysts have examined the extent to which self-employment fosters immigrant incorporation. Such research provides mixed results. However, the existing scholarship neglects the effects that the business cycle has on immigrants’ propensity for self-employment. This article therefore fills this gap by analyzing Mexican immigrant business formation and collapse through two recession periods – the dot-com crash of 2001 and the Great Recession of 2008 – and two periods of strong economic growth – 1994-2000 and 2002-2007. It finds that Mexican immigrants are pushed into self-employment as co-ethnic unemployment rates rise. These effects filter throughout various subcategories and control variables, including gender, period of entry, and citizenship. These findings are consistent with disadvantaged theories of self-employment.