Whose Job Is It Anyway? Coethnic Hiring in New US Ventures

We explore co-ethnic hiring among new ventures using U.S. administrative data

Sari Pekkala Kerr; William R. Kerr


Scholarcy highlights

  • Immigration has signi...cantly reshaped the workplace in America over the past ...fty years
  • Our analyses show how these co-ethnic hiring rates systematically relate to the local workforce composition surrounding new ...rms, the native languages spoken by ethnic groups, and the cultural similarity of groups to the United States
  • We focus on new ventures so that we can characterize the early hiring decisions being made by employers
  • We use the greater sample size at the industry level to disclose three additional features of co-ethnic hiring: 1) the comparable share of initial employment in the ...rm that comes from other immigrant groups and a benchmark to what would be expected if hiring at random from the metropolitan statistical areas the average earnings percentile of co-ethnic employees within the ...rms, and 3) the distribution of co-ethnic hiring across granular hiring bins ranging from no co-ethnic employees are hired to where 75% or more of hires are co-ethnic
  • Co-ethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging twenty-fold from less than 2% to more than 40%
  • A one-standard deviation increase in genetic or linguistic similarity among initial employees is associated with a 1% increase in ...rm survival rates, 21 This is consistent with results from other studies that show that immigrant entrepreneurs tend to start smaller ...rms in terms of worker counts than natives, with much of the higher ...rm growth subsequently being measured for immigrant-founded companies coming through employment convergence over time
  • Co-ethnic hiring grows in the presence of a large local workforce surrounding new ...rms with members of the ethnic community, greater linguistic distance of the group to English, and lower cultural/genetic similarity of groups to the United States
  • We ...rst model the implementation of E-Verify as an interaction term in our estimations that include our typical metropolitan statistical areas-Industry-Year and Ethnic ...xed e¬§ects, along with controls for the traits of top initial earners and ...rms

Need more features? Save interactive summary cards to your Scholarcy Library.