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Open Access

Social Networks, Ethnicity, and Entrepreneurship

William R. Kerr and Martin Mandorff
Journal of Human Resources, January 2023, 58 (1) 183-220; DOI: https://doi.org/10.3368/jhr.58.3.0719-10306R2
William R. Kerr
William Kerr is a Professor at Harvard Business School and a Research Associate at the National Bureau of Economic Research.
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Martin Mandorff
Martin Mandorff is an Economist at the Swedish Competition Authority.
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ABSTRACT

We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more concentrated in self-employment for dry cleaning than other immigrant groups, and Gujarati-speaking Indians are 84 times more concentrated in managing motels. We quantify that smaller and more socially isolated ethnic groups display higher rates of entrepreneurial concentration. This is consistent with a model of social interactions where nonwork relationships facilitate the acquisition of sector-specific skills and result in occupational stratification along ethnic lines via concentrated entrepreneurship.

JEL Classification:
  • L26
  • D21
  • D22
  • D85
  • F22
  • J15
  • L14
  • M13
  • Received July 2019.
  • Accepted November 2020.

This open access article is distributed under the terms of the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0) and is freely available online at: http://jhr.uwpress.org

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Journal of Human Resources: 58 (1)
Journal of Human Resources
Vol. 58, Issue 1
1 Jan 2023
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Social Networks, Ethnicity, and Entrepreneurship
William R. Kerr, Martin Mandorff
Journal of Human Resources Jan 2023, 58 (1) 183-220; DOI: 10.3368/jhr.58.3.0719-10306R2

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Social Networks, Ethnicity, and Entrepreneurship
William R. Kerr, Martin Mandorff
Journal of Human Resources Jan 2023, 58 (1) 183-220; DOI: 10.3368/jhr.58.3.0719-10306R2
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Keywords

  • L26
  • D21
  • D22
  • D85
  • F22
  • J15
  • L14
  • M13
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