Abstract

We conduct a comprehensive analysis of Mexican-American entrepreneurship. We find that low levels of education and wealth explain the entire gap between Mexican immigrants and non-Latino whites in business formation rates; together with language ability, these factors explain nearly the entire gap in business income. Legal status represents an additional barrier for Mexican immigrants, reducing business ownership rates by 0.7 percentage points. Human and financial capital deficiencies limit business ownership and business success among second and third-generation Mexican-Americans to a lesser extent. These findings have implications for the debates over the assimilation of Mexican-Americans in the United States.