United States Small Business Administration
Office of Advocacy
RS 169
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Purpose
The Office of Advocacy has long been interested in illuminating
differences in the way small and large firms operate in the U.S.
economy. In addition, research into the special contributions
that small firms make to the economy has been a high priority
on Advocacy's research agenda.
This study examines the frequency with which recent immigrants
(those living in the United States for less than 12 years), earlier
immigrants (those living in the United States for 12 or more years),
and native-born individuals are employed in small firms (less
than 500 employees), as opposed to large firms.
Specifically, the study addresses the following questions: to
what extent do new immigrants initially employed by small firms
switch to large firms after accumulating job experience and knowledge
of the English language; and, is the tendency to switch employment
from small to large firms greater for immigrants than for native-born
individuals of the same race, age, and gender, and with the same
amount of education.
Scope and Methodology
Data for this study come from two sources, the Decennial Populations
Census, Public Use Microdata Samples (PUMS) for 1990 and 1980,
and the Current Population Survey (CPS) Annual Demographic File
for 1994. Each of the data sets has advantages and limitations.
The advantage of the PUMS is large sample size. For each decennial
census, the PUMS files contain information on approximately 15
million persons, including their proficiency in speaking English.
The major limitation of the PUMS is that it does not directly
indicate the size of the firm in which each person is employed;
it does, however, indicate the industry.
The main advantage of the CPS is that it identifies the employment size of the firm where each individual is employed.
Its disadvantage is small sample size -- 150,000 persons.
Both the PUMS and CPS contain place-of-birth information. In
this study, a person is classified as an immigrant if he or she
was born outside the United States or in Puerto Rico or other
outlying areas. "Native-born" refers to individuals
born in the United States or born abroad to at least one American
parent.
Well-recognized techniques of statistical estimation and analysis
were used to investigate the two data sets.
Highlights
Conclusion
The study shows that recent immigrants are more frequently employed
in small firms than earlier immigrants and native-born individuals.
The patterns suggest that new immigrants find their first jobs
in small firms and after gaining a knowledge of English move to
larger firms. The overall findings demonstrate a contribution
that small firms make to the process of assimilating new immigrants.
Given the size and growth of the immigrant population in the United
States, this contribution is important in the overall performance
of the U.S. economy.
Ordering Information
The complete report is available from:
National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
(703) 487-4639 (TDD)
Order Number: PB96 168851
Cost: A05/$21.50; A01/$10.00 Microf.
*Last Modified 6-11-01