On Immigration and Native Entrepreneurship

35 Pages Posted: 22 Mar 2021

See all articles by Harriet Orcutt Duleep

Harriet Orcutt Duleep

College of William & Mary - Policy School

David A. Jaeger

University of St. Andrews - School of Economics and Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); University College London - CReAM - Centre for Research and Analysis of Migration

Peter McHenry

William & Mary; IZA Institute of Labor Economics

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Abstract

We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more exible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.

JEL Classification: J15, J24, J39, J61, L26

Suggested Citation

Duleep, Harriet Orcutt and Jaeger, David A. and McHenry, Peter, On Immigration and Native Entrepreneurship. IZA Discussion Paper No. 14188, Available at SSRN: https://ssrn.com/abstract=3808451 or http://dx.doi.org/10.2139/ssrn.3808451

Harriet Orcutt Duleep (Contact Author)

College of William & Mary - Policy School ( email )

P.O. Box 8795
Williamsburg, VA 23185
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David A. Jaeger

University of St. Andrews - School of Economics and Finance ( email )

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St. Andrews, Fife KY16 8RD
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National Bureau of Economic Research (NBER) ( email )

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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University College London - CReAM - Centre for Research and Analysis of Migration ( email )

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Peter McHenry

William & Mary ( email )

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Williamsburg, VA 23187
United States

IZA Institute of Labor Economics ( email )

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Germany

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