Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States

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2021-12-13
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Lee, Jun Yeong
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© Author(s) 2021
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Winters, John
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Economics
Abstract
Immigrant entrepreneurs are critical to regional and national economies. Immigrants in the USA have higher self-employment rates than natives, and immigrants have made outsized contributions as founders of numerous highly successful firms. However, we document that immigrant self-employment rates vary considerably across areas of the USA. Our main measure is the percentage of immigrant workers in an area who are self-employed; i.e., the self-employment rate for the foreign-born. Areas with colder winter temperatures have especially low self-employment rates among their immigrant populations compared to other areas of the USA. This relationship holds for numerous sub-samples of immigrants and is not driven by any particular group. The relationship persists after controlling for numerous individual and local area characteristics. Immigrant entrepreneurs appear to be especially forward-looking and responsive to warmer January temperature as a locational amenity. The results have important implications about the location choices of immigrant entrepreneurs.
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JEL Classification: J61, L26, and R23. Length: 49 pages. Original Release Date: December 13, 2021.
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