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Theoretical Testing for Ethnic Entrepreneurship

Three of the critical components of both ethnic enclave theory and middleman minority theory, the grounding theories of ethnic entrepreneurship, are 1) the move to a new place, 2) discrimination in the labor force, and 3) the creation of business enterprises of a particular kind, generally considered as retail and service. We have discussed differences found in the characteristics of the businesses and business owners of the respondents in our sample, identified as a community engaged in ethnic entrepreneurship, and those of respondents in samples identified by similar ethnicity but conveying no sense of patterns of community involvement in business creation. We now turn to the empirical testing of the theories underlying the definition of ethnic entrepreneurship to see if we can begin to explain those differences. The sample of Pakistani/Ismailis discussed here is predominantly immigrant (87%) and reflects the young nature of the community itself. As established earlier, most members of the community came to the U.S. either for educational or business opportunities or to join family or a spouse. The "pull" notion of entrepreneurship is evident and the theoretical component of immigration, in this case the move to the U.S., is met. However, not all immigrant groups display a tendency towards entrepreneurial behavior (Light & Rosenstein, 1994; Waldinger, et al., 1990). Whereas this condition is certainly not sufficient to explain the behaviors noticed here, it should be noted that immigration is not a condition in any of the other samples used in the above comparisons.

The question of discrimination has not yet been addressed. Respondents to our study answered a series of questions focused on their perception of discrimination in the U.S. labor force. Table 4 presents the findings on these questions and compares results between immigrants and the native born in our sample. These findings are supported by other data gathered on descriptions of the type of discrimination experienced. However, the comparisons between those in the immigrant category and the native born must be made cautiously due to the small number of native borns in the sample.


Perceptions of discrimination in the U.S. labor force: Immigrant versus native born

Questions and response categories Full Sample n=92 Immigrant n=80 Native born n=12
Do you think you have been discriminated against in the job market in this country (i.e. as an employee or while looking for a job?
Definitely yes 3.5 3.9 0
Probably yes 19.8 22.1 0
Undecided 41.9 39 66.7
Probably no 22.1 23.4 11.1
Definitely no 10.5 10.4 11.1
Have always been self–employed in the U.S. 2.3 1.3 11.1
Do you think members of your racial/ethnic group have the same job opportunities as most other Americans in the United States?
Yes 72.8 72.7 91.7a
No 23.9 27.3 8.3
Have you had any difficulty in finding an occupation appropriate to your training and skill?
Yes 16.3 16.9 16.7
No 80.4 83.1 83.3

a p<.10

Few respondents claim they have definitely been discriminated against in the U.S. job market, approximately 20% claim they probably have been discriminated against and almost 42% of the full sample are undecided. Recognizing the limited nature of the comparisons, those of immigrant status do report greater feelings of discrimination, both as to the extreme "definite" measure and even more so as to "probably." The difference between the two groups comes from the "undecided" category since all negative measures are very similar.

Immigrant and native born respondents also show a significant difference, although only at the .10 probability level, in their beliefs regarding an equal opportunity structure. Of the immigrant respondents, 72.7% believe that the opportunity structure is the same for members of their ethnic group as for "most other Americans." For the native born that figure is 91.7%. However only approximately 17% of each group reports having difficulty in finding an occupation appropriate to their training and skill.

None of the self–employed respondents (n= 55) report that they have definitely been discriminated against in the labor force, although almost half report that they have probably experienced such discrimination (46.2%). However, 9.1% of the wage and salary respondents do report definite discrimination. The wage and salary respondents are also more likely to report that they have probably not (18.2%) or even definitely have not (18.2% ) been discriminated against. In contrast, only 9.1% of the self–employed respondents report either probably not or definitely not experiencing discrimination. The groups disagree as to the nature of the opportunity structure. Interestingly, it is the wage and salary respondents who report less of a sense of sameness of job opportunities for members of their ethnic group and other Americans (63.6% wage and salary, 81.5% self–employed). As with the immigrant and native born groups, only approximately 17% of both groups report having difficulty in finding an appropriate occupation.

We have seen that this is largely a community of immigrants and have analyzed the perception of the respondents towards discrimination in the labor force. The final theoretical element to be tested is that of a tendency toward the creation of businesses in certain industrial sectors, specifically retail and service. A return to Table 2 allows us to consider those demographics in a more precise theoretical light. Given that the survey does not yet represent a random sample of the identified population we cannot generalize the rate of self–employment across the community. It is possible that we have oversampled for the self–employed and non response bias tests currently being conducted will allow us to address that point. However, it remains that the rate of self–employment is higher than that seen across the U.S. and the two major industrial sectors in which the respondents participate most often are retail and service.

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