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Yamaguchi / Impact of Social Capital on Immigrant Self-Employment in Hawaii 49

Graduate Journal of Asia-Pacific Studies 7:1 (2010), 49-69

Impact of Social Capital on Self-Employment among Immigrants in Hawaii

Ayano YAMAGUCHI Reitaku University [email protected]

Abstract

This study examined the impact of various forms of social capital drawn from social, cultural, and family resources on self-employment in the state of Hawaii. Data came from the U.S. 2000 Census involving all immigrants in Hawaii with particular interest given to the five Asian-immigrant groups (Japanese, Chinese, Korean, Filipino, and Vietnamese) aged between 18 and 65. The study found that social and cultural resources (i.e., presence of extended family, length of stay in the U.S., and ethnicity) and family resources (i.e., marital status, presence of children under 18 years of age, and number of children under 18 years of age) had a positive impact on the likelihood of self-employment. Finally, this study revealed that the role of social capital can enhance self-employment among immigrants in Hawaii.

Introduction RECENTLY, SELF-EMPLOYMENT has become an important aspect of

economic advancement and upward mobility for immigrants (Sanders & Nee, 1996). In particular, research has focused on self-employment from the view of social capital (Aldrich & Carter, 2004; Aldrich, Carter, & Ruef, 2004; Light & Bonacich, 1988; Min & Bozorgmehr, 2002; Sanders & Nee, 1996; Zhou & Portes, 1996). Sanders and Nee (1996) explain that ‘social capital has often been examined in terms of paternalistic relationships between employees and workers and financing that is based on social relations within an ethnic group’ (p. 232). For example, immigrants are able to open their own businesses using the social capital of family resources such as family ties and networks to assess their social and community resources to U.S labor market (Sanders & Nee, 1996; Bourdieu, 1986; Coleman, 1988, 1990; Portes, 1995; Zhou & Bankston, 1994). This access is possible even if they neither speak English fluently nor have the appropriate educational background. Bonacich (1988) explains that self-employment among immigrants often displays similar conditions and patterns: long working hours, low hourly earnings, and poor working conditions. This form of self-employment is an extension of the low-wage ethnic labor market among immigrants (Bonacich, 1988). The present study demonstrated that the idea introduced by Bonacich (1988) still applies today. In other words, immigrants in Hawaii may open their own businesses by relying on their social

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capital such as social, cultural and family resources, even though they lack the appropriate human capital.

Despite evidence of immigrants working in self-employed traditional businesses in Hawaii having achieved successful upward mobility (Bonacich, 1988; Zhou, 2008), there is still little research on how social capital such as social and cultural resources affect their self-employment. Therefore, the purpose of this study was to explore the impact of various forms of social capital on self-employment among immigrants in Hawaii. As mentioned, this social capital could be social and cultural resources (e.g., whether the immigrants have extended family, how long the immigrants have been in the U.S., and the proportion of one’s ethnicity in the area), or family resources (e.g., whether the immigrants are married, whether the immigrants have children under 18 years of age, and how many children under 18 years of age).

Specifically, the current study expanded on the current literature in three ways. First, data from Hawaii (based on the U.S Census 2000) was examined to see if the previous findings are applicable in Hawaii. Second, social capital was represented by several variables of social and cultural resources including length of stay in the U.S. and various family-structure characteristics in order to assess their social and community resources to U.S labor market. Third, this study identified the social and cultural determinants of self-employment among ethnic and cultural groups to determine how ethnic and cultural diversity in social and cultural resources affect the nature of self-employment. Ethnic and cultural diversity provides the potential for further research on ethnicity-oriented social capital for self-employment.

Theoretical Background of Social Capital on Self-Employment Individual Resources

Generally, human capital is defined as people’s skills and abilities used in employment and other contributions to the economy (Schultz, 1961; Becker, 1964). Schultz (1961) highlights Western countries as an example and attributes their increase in national output as the result of investment in human capital. He also makes a direct link between an increase in investment in human capital and an overall increase in workers’ earnings.

Human capital is a stock of assets one owns that allows one to receive a flow of income, which is like interest earned from investment, and it is substitutable (Becker, 1964). In brief, human capital is defined as an individual’s ability to promote themselves, get a better lifestyle, and access jobs. In this study, human capital is operationalized as English proficiency (see Borjas, 1990; Zhou & Portes, 1996) and educational attainment (see Portes & Bach, 1985). For immigrants in Hawaii, specifically important human capital is English-language proficiency. Communication capability and skill are viewed as integral parts of work. Without proper English-language proficiency and educational attainment, such as the ability to communicate inter-culturally within multicultural and multiethnic communities, assets are less likely to adequately and successfully translate into earnings power in the U.S. labor market. English-language proficiency is also key for social integration, in addition to economic assimilation of immigrants in Hawaii. This theory also


explains that English proficiency and educational attainment need to be considered as significant factors when immigrants achieve upward mobility in the U.S. labor market. Human capital theory implies that English proficiency, which is measured in terms of acquiring English-language skills, supports and promotes socioeconomic factors.

As the U.S. labor market generally demands at least oral communication skills in English, attainment of adequate language proficiency may influence rates of self-employment. In the case of Asian immigrants, Filipinos are expected to have the least trouble with oral communication skills in English since this is one of the two official languages of the Philippines. However, most Chinese, Japanese, Korean, and other Asian immigrants analyzed in this study would not speak English fluently, since it is not an official language in these countries.

However, human capital theory does not directly explain the characteristics of self-employment. Using Australian data, Evans (1989) found that the larger the percentage of self-employed in a group that is not fluent in English, the greater the probability that members of that group will have started their own businesses. Haller (2004) explains that educational attainment affects the likelihood of successful socioeconomic and cultural integration of first generation immigrants and their descendents through self-employment. Therefore, this study focuses on human capital variables of English proficiency and educational attainment, both of which may directly address obtaining conventional jobs in the U.S. labor market.

Family Resources

Coleman (1988, 1990) considers social capital to be one of three forms of capital (the others being financial and human). ‘Social capital is defined by its function. It is not a single entity, but a variety of different entities having two characteristics in common: They all consist of some aspect of social structure, and they facilitate certain actions of individuals who are within the structure’ (Coleman 1990, p. 302). Coleman also extends the idea of social capital for successive generations of the family. Social capital is developed in the family through involved and supportive parenting, which functions as an investment in children and contributes to their educational achievements or human capital. He states, ‘[t]he social capital of the family is the relation between children and parents’ (1988, p. 384).

Some studies further extends on Coleman’s (1988, 1990) idea of social capital as family resources. Sanders and Nee (1996) discuss the social capital of families. To measure family-based social capital, they used three family-characteristic variables: the presence of cohabiting marital partners, the number of other related adults, and the number of teenagers. Using the 1980 Public Use Microdata Series, Boyd (1990) conducted a similar analysis in predicting Asian-American and African-American self-employment. However, instead of using the presence of a spouse and the mean number of adult and teenage relatives, Boyd (1990) used family types (married with children versus married with no children) and the presence of extended family as measures of family ties for social capital.

Both Sanders and Nee (1996) and Boyd (1990), found a positive significant relationship between family characteristics and self-employment after controlling for human capital and other variables. Sanders and Nee conclude that ‘[t]he pervasiveness of immigrant-owned businesses in the United States can best be


understood in terms of the combined effects of human capital/class resources and social capital embodied in family relations’ (p. 247).

Social and Cultural Resources

Over the past few decades, research has increasingly focused on social and cultural resources. Recent research has also regarded some aspects of these resources as social capital and referred to the definitions of Bourdieu (1986) and Coleman (1988, 1990). Bourdieu saw the structure of social capital as existing in social networks or ties and argued that social capital can be transformed into other forms of capital. Coleman argues that social capital exists within the relationships between and among individuals. Therefore, social capital may provide some connections or networking to access the U.S. labor market in order to open one’s own business. In this sense, the structure of social capital can be seen as webbed. Given such, social capital in this study is defined as social and cultural resources that an individual accesses to mobilize potential or actual resources for choosing the path of self-employment among immigrants.

Bourdieu (1986) also emphasizes analyzing social and cultural activities in terms of cultural contexts. Coleman (1988, 1990), and Zhou and Bankston (1994) address construction from one’s cultural endowments and include obligations and expectations, information channels, and social norms. Portes (1995) states that these social and cultural resources are increased when linear ethnicity is greatly emphasized and when social networks become dense and intensive. A density of social networks increases the number of adults in a community on whom parents can rely for support. It also increases and enhances the resources available to the second generation. Furthermore, successful facilitation of self-employment impedes downward mobility. This suggests that webbed social resources should be considered within the context of cultural diversity, i.e., ethnicity. In this study, ethnicity is defined as the cultural characteristic that can distinguish a specific individual or group from others and that can offer the foundation for cultural norms and heritage.

Belonging to an ethnic group implies individuals share a cultural heritage and helps achieve a sense of neighborhood or community with others who identify themselves as belonging to the same ethnic group. For example, Filipino communities tend to encourage Filipinos to choose paid employment. As a result, Filipino immigrant groups have lower rates of self-employment. Conversely, Vietnamese immigrant groups often choose self-employment because they tend to have lower human capital and are isolated from the U.S. labor market. The factor of cultural diversity may play an essential role in determining self-employment, especially in Hawaii’s multicultural and multiethnic society.

Previous studies show that ethnicity could be the social capital for self-employment (see Aldrich & Carter, 2004; Aldrich, Carter, & Ruef, 2004; Min & Bozorgmehr, 2002). For example, Chinese immigrants in the first half of the twentieth century specialized in laundry and restaurant businesses, while Japanese immigrants at that time were heavily concentrated in farming and market gardening, as well as in wholesale and retail sales of farm products in California. However, the business specializations of contemporary immigrant groups are much more varied than those of the turn of the century. There are significant inter-city differences in business


patterns for a particular entrepreneurial group, partly caused by inter-city differences in industrial and urban structure and partly caused by differences in group characteristics.

Light and Bonacich (1988) found that between 1965 and 1982, Korean immigrants had the motivation, money, and education to open their own businesses, as well as the ethnic resources to assist them in self-employment. In contrast, communities of Vietnamese immigrants in the U.S. were often found in deprived neighborhoods, where social and cultural resources were the most prominent and offer the greatest potential. Vietnamese immigrants rely on these social and cultural resources for guidance and multi-dimensional support when they open their small businesses (Aldrich & Carter, 2004; Aldrich, Carter, & Ruef, 2004; Min & Bozorgmehr, 2002; Zhou & Portes, 1996).

Filipino immigrants, on the other hand, are characterized as higher potential human capital immigrants due to having traits such as higher English proficiency (Sanders & Nee, 1996). Since they are educated to speak English as an official language in their homeland, they are more likely than other immigrants to obtain jobs in the U.S. after they emigrate.

Control Variables

The age range of the working population in the U.S. is between 18 and 65 years. This specification of age controls a cohort effect in which the early arrivals of an immigrant group, who are also the oldest members of the immigrant group, are more likely to have low rates of self-employment (Borjas, 1990). Gender may also influence the likelihood of self-employment. For example, Hughes (1999) noted the complexity and polarization within self-employment of women and men, as well as the public policy implications.

Research Question The primary purpose of this paper was to explore how immigrants exploit

potential resources, which may be social capital, in order to set up their own small business. The potential resources could be social in nature, such as networking or connections within the U.S. labor market. An individual may also use family resources (Coleman, 1988, 1990; Sanders & Nee, 1996) to get access to the U.S. labor market and open their own small business. Therefore, the research question was: What is the impact of various forms of social capital (such as social, cultural, and family resources) on the likelihood of self-employment for all immigrants in Hawaii, with particular interest to the five Asian-immigrant groups (Japanese, Chinese, Korean, Filipino, and Vietnamese)?

Method Data and Statistical Model

The Census 2000, 5 Percent Public Use Microdata Series (PUMS) for the Hawaii census area was employed in this study to analyze self-employment. Logistic


regression analysis was used, because the dependent variable (self-employment) was dichotomous. To analyze output and results of the data, the Odds Ratios were used.

This study compared three models of self-employment. The first model controls only the broad concept and scope of social capital, which includes social and cultural resources. In this model, social and cultural resources are defined as the presence of extended family and length of stay in the U.S. To explore the cultural contexts that influence the likelihood of self-employment, social and cultural resources could also include ethnicity as specific Asian immigrant groups: Japanese, Chinese, Korean, Filipino, Vietnamese, “All other Asian immigrants”, native Hawaiian and Pacific Islanders, and “All other immigrants”. The second model adds family resource variables, which are considered marital status, the presence of children under 18 years of age, and the number of children under 18 years of age. The last model adds the human capital and control variables to the baseline and includes all of the variables in the analysis. Human capital variables are English proficiency and educational attainment, and the control variables include age, gender, and citizenship.

Participant Sample

This research focuses on all immigrants in Hawaii with particular interest given to the five Asian-immigrant groups (Japanese, Chinese, Korean, Filipino, and Vietnamese) aged between 18 and 65 years. This study examines how social and cultural resources may influence self-employment of native-born Americans and immigrants. In particular, the situation of immigrant Japanese (N=397), Chinese (N=551), Koreans (N=334), Filipinos (N= 2587), Vietnamese (N=130), “All other Asians” (N=215), Native Hawaiian and Pacific Islanders (N= 580), and “All other immigrants” (N=456) are used to analyze cultural diversity contexts, because these groups comprise the major immigrant groups in Hawaii.

Dependent Variable

Self-Employment Self-employment is defined as the state of being employed in one’s own

unincorporated business and owning one’s own incorporated business (U.S. Census Bureau, 2000). A dummy variable is created in order to analyze the likelihood of self-employment. The default category is paid employment.

Independent Variables

Social and Cultural Resources Presence of Extended Family An extended family is defined as a married couple with or without their own

children under 18 years old who have never been married, or a single parent with one or more never-married children under 18 years of age based on the U.S. Census Bureau (2000). An extended family does not maintain its own household, but lives in a household where the householder or householder’s spouse is a relative.


Subfamilies are defined during the processing of sample data (U.S. Census Bureau, 2000).

Length of Stay Recent immigrants in this study are defined as immigrants who have migrated

to the U.S. within the last five years. The length of stay is expected to have an impact on the likelihood of being self-employed (Stier, 1991).

Ethnicity In this study, ethnicity of immigrants is an important determinant of self-

employment, because ethnicity facilitates and promotes ethnic and cultural customs, norms, and values of lifestyle (Bonacich, 1988; Zhou, 2008). Immigrants may share similar ethnic and cultural backgrounds or patterns with other individuals from the same ethnic groups. In contrast, their children and grandchildren are considered to have assimilated and adapted themselves to the culture of native-born Americans (Antecol, 2000, 2001). For example, Zhen and Xie (2004) observed that members of the 1.5 generation often do not seem to distinguish themselves from the native-born American population in terms of English proficiency, familiarity with American culture, and educational and labor market experiences and outcomes. For purposes of this study, an immigrant’s ethnicity is regarded as fitting into only one of the five ethnic categories defined in this study (i.e., Japanese, Chinese, Korean, Filipino, and Vietnamese). The “All other Asian immigrants” group is comprised of Southeast Asians, South Asians, and other Asians not previously included. The “All other immigrants” group is composed of Caucasians, Africans, Europeans, other races not previously included, and those individuals of two or more major races. Native-born Americans are categorized as the omitted category and are also compared with immigrants.

Family Resources Marital Status Marital status may influence the probability of self-employment. Marital status

in this study is divided into four categories: widowed, divorced, separated, and never married (single). Married is the default category.

Presence of Children under 18 Years of Age The presence of children under 18 years of age may positively influence the

likelihood of self-employment. Children were often the household’s experts on information technology and took over the responsibility of associated business tasks for self-employment (Baines, Wheelock & Gelder, 2003). In this study, the presence of children under 18 years of age is divided into four categories: with their own children under 6 years only, with their own children 6 to 18 years only, with their own children under 6 years and 6 to 18 years, and with no children under 18 years (U.S. Census Bureau, 2000).

Number of Children Under 18 Years of Age


The number of children under 18 years of age may affect the likelihood of self-employment for the same reason as the presence of children under 18 years of age.

Individual Resources Educational Attainment Educational attainment plays an important role in the likelihood of self-

employment and employment because educational attainment skills promote ethic ties and networks to establish their small business. For this reason, educational attainment is categorized in the following manner: high school graduate, more than one year of college, college graduate, and some graduate schooling. The default category is an education of less than a high school degree.

English Proficiency English proficiency also plays an important role in human capital because the

U.S. labor market requires at least oral English communication skills. For the aim of this study, English proficiency is defined as those who can speak English well or very well. Dummy variables are used to examine English proficiency.

Citizenship Citizenship may have a positive impact on the likelihood of self-employment

(Buchmueller, DiNardo & Valleta, 2002). In this study, citizenship is divided into two groups based on citizenship status: legal immigrants with U.S. citizenship and legal immigrants with visa status.

Control Variables

Age Age may play an important role in the likelihood of self-employment. The

influence of age was hypothesized to be curvilinear with the possibility of self-employment increasing with age up to a given age and then declining based on their age to access the job market.

Gender Gender may influence the likelihood of self-employment. Gender is dealt with

as a categorical variable. Male is the default category.

Results Social and Cultural Resources

First, descriptive statistics were performed for the data employed in this study. The descriptive statistics in this participant sample can be found in Table 1 (see Appendix). Second, a logistic regression was conducted in order to explore the likelihood of Asian immigrant groups choosing self-employment over paid employment. The results from the Odds Ratios are presented in Table 2 (see Appendix).


Model 1 indicated the statistical influence of the broad context, which is defined as the social capital of social and cultural resources. In particular, the results showed that length of stay in the U.S., presence of extended family, and ethnicity all influence the likelihood of self-employment.

Length of stay in the U.S. demonstrated a higher level of significance, as illustrated in Model 1. Immigrants who have stayed in the U.S. for more than five years were 1.03 times more likely to be self-employed than those immigrants who have stayed in the U.S. less than five years. However, presence of extended family had a significantly negative impact on the likelihood of self-employment, with those immigrants only 0.64 times as likely to be self-employed.

Ethnicity played an important role in the decision to become self-employed. Being Korean or Vietnamese had a significantly positive impact on the likelihood of self-employment. Their rates of self-employment were 1.40 and 1.81, respectively. In contrast, being Japanese or Filipino showed a significantly negative effect on the likelihood of self-employment. The rates of self-employment were 0.65 and 0.31, respectively. Being from the “All other Asian immigrants” or “All other immigrants” groups demonstrated a positive impact on the likelihood of self-employment, but the coefficients were not significant. These rates of self-employment were 1.26 and 1.14, respectively. Therefore, this observation seemed to support previous research (Bonacich, 1988; Zhou, 2008) showing ethnic groups have different factors to consider in determining whether to become self-employed.

Social and Cultural Resources and Family Resources

Model 2 (Table 2, Appendix) included family resource variables to examine whether or not immigrants take into account their family situation as a determinant in the decision to become self-employed. Marital status was expected to be a significant determinant of self-employment. The results indicated that, compared with their married counterparts, widowed or divorced immigrants are more likely to become self-employed, whereas being separated or never-married means that immigrants are less likely to become self-employed. Being a widow or divorcee made immigrants, respectively, 1.05 and 1.10 times more likely to be self-employed compared with their married counterparts; whereas, being separated or never married meant that they will be about 0.80 and 0.45 times as likely to be self-employed as their married counterparts will. Although the coefficients of being widowed, divorced, and separated were not significant, being never married was significant.

In exploring the presence of children, Model 2 showed that the presence of children under 18 years of age means that a person is 1.20 times more likely to become self-employed. The number of children under 18 years of age meant that a person is 1.08 times more likely to become self-employed. Both had a statistically significant impact on the likelihood of self-employment.

Model 1 illustrated how social and cultural resources affect the likelihood of self-employment in terms of length of stay in the U.S., the presence of extended family, and an individual’s ethnicity. These social and cultural resource variables should have a weaker impact on the likelihood of self-employment after family resource variables have been factored in. However, although family resource variables were statistically controlled, the results indicated that the impact on social


and cultural resources strongly influences the likelihood of self-employment overall. At the same time, family resource variables also had a strong impact on the likelihood of self-employment.

Model 2 demonstrated that the length of stay in the U.S. has a significant effect. Similar to the results of Model 1, those who have lived in the U.S. for more than five years increased their likelihood of self-employment by 1.02 times. The presence of extended family was also statistically significant, but decreased by 0.60 times the likelihood of self-employment.

Ethnicity was found to be a highly significant factor. Among the ethnic groups observed, Vietnamese were 1.63 times more likely to become self-employed compared to native-born Americans. Being Vietnamese had a significant and positive impact on the likelihood of self-employment. Conversely, being Japanese or Filipino meant that the individual is 0.51 and 0.28 times less likely to be self-employed, respectively, compared with native-born Americans. Both ethnicities showed a significant negative impact on the likelihood of self-employment. Being from the Korean or “All other Asian immigrants” groups had a positive impact on the likelihood of self-employment, but the coefficients were not significant. The rates of self-employment were 1.20 and 1.11, respectively. Conversely, having a Chinese, Native Hawaiian, or Pacific Islander, or “All other immigrant” background showed a negative impact on the likelihood of self-employment, but, again, the coefficients were not significant. The rates of self-employment were 0.87, 0.72, and 0.92, respectively.

Social and Cultural Resources, Family Resources, and Individual Resources

The last model, Model 3 (Table 2, Appendix), included individual resources and control variables to allow investigation of how human capital investment affects the likelihood of self-employment. The results showed that human capital variables and control variables play a significant role in decision-making concerning self-employment.

In part, educational attainment played a significant role in the self-employment of immigrants. The likelihood of self-employment significantly decreased with the level of educational attainment. Those who graduated from high school or who have more than a college level education were 0.77 times and 0.82 times less likely to become self-employed, respectively, compared with those who did not graduate from high school. In contrast, having more than one year of college or graduate schooling increased the likelihood of being self-employed by 1.02 and 1.08 times, respectively, although the coefficients were not significant. English proficiency also increased the likelihood of self-employment by 1.03 times, but the coefficient was not significant. Being a U.S. citizen decreased the likelihood of self-employment compared with that of non-U.S. citizens by 0.83 times. However, the coefficient was not significant in this study.

The effect on human capital in Model 3 showed that English proficiency is a strong determinant of decision-making toward being self-employed. Other variables in this study may affect the likelihood of self-employment. As a result, for Koreans and Vietnamese, ethnicity was observed to positively affect the likelihood of self-employment, and the coefficient was significant. For Chinese, ethnicity was also observed to positively affect the likelihood of self-employment, but in this case, the


coefficient was not significant. In contrast, for Japanese, ethnicity was observed to negatively impact the likelihood of self-employment, but the coefficient was not significant. On the other hand, Filipino ethnicity was observed to negatively impact the likelihood of self-employment with significant coefficient for Models 1 and 2, being Filipino seemed to indicate a slight increase in the likelihood of self-employment compared with native-born Americans in Model 3. For “All other Asian immigrants”, ethnicity was observed to have a positive impact on the likelihood of self-employment. The coefficient was significant in Model 3. For Native Hawaiian and Pacific Islanders and “All other immigrants”, ethnicity was still observed to positively affect the likelihood of self-employment, but the coefficient was not significant. Family resource variables supported and agreed with Models 2 and 3. In particular, people who have never been married were found to be 0.44 times less likely to become self-employed than their married counterparts, as shown in Model 2. After human capital variables were included, a person who has never been married was 0.86 times less likely to become self-employed than his/her married counterpart, as shown in Model 3.

Control Variables

Age was observed to have a highly significant impact on the likelihood of self-employment. The effect of age was curvilinear with the likelihood of self-employment increasing with age up to about 50.5 years and then declining. The coefficient of age was significant. Being female meant that one is 0.66 times less likely to be self-employed than one’s male counterpart. The coefficient of being female was also significant.

Discussion This study examined how the social capital of social, cultural, and family

resources contributes to the likelihood of self-employment among immigrants in the state of Hawaii. Data from the U.S. Census for 2000 were used to identify and analyze factors to be considered when choosing self-employment.

Some aspects of social capital produced a strong explanation for self-employment among immigrants in Hawaii. Even though immigrants may not have integrated with their neighbors or community members who could aid in finding job opportunities or may not know the American labor market well enough to start their own businesses, they took advantage of family members, including their children, as family resources, and ethnic networks or ties in order to become self-employed. Moreover, if an immigrant’s family had more children, he or she was more likely to be self-employed. This was because immigrants could further establish their potential resources through their children’s or their relatives’ networks or connections (Treiman & Ganzeboom, 2000). Self-employment was more likely to influence intergenerational economic mobility. It was also more likely to indirectly affect economic mobility through human capital and social capital resources with income and wealth (Treiman & Ganzeboom, 2000). Moreover, small business as self-employed formation and success may have been influenced by the social capital of its founders, such as the extent and diversity of social networks and start-up teams (Aldrich, Carter, & Ruef, 2004).


Immigrants who have lived in the U.S. for more than five years were more likely to choose self-employment than those who have lived in the U.S. for fewer than five years. This finding suggested that staying in the U.S. for more than five years means that an immigrant is more likely to adjust to a life in the new environment and acquire appropriate social skills in intercultural and/or multicultural communication. As a result, the person could build his or her potential resources to start one’s own business. This finding also suggested that immigrants tend to access the American labor market in their ethnic communities more easily, to find the opportunities to start their businesses within their communities, and to build interpersonal relationships with the community members who may help and offer them opportunities or other alternative resources to start their businesses. This explanation seemed to support and to be consistent with the Odds Ratio of self-employment, which increases for those immigrants who have lived in the U.S. for more than five years.

Overall, Asian immigrant groups did not always take advantage of their ethnic networks, ties, or their cultural norms and values to access the American labor market via their ethnic communities in order to start their own businesses (Bonacich, 1988; Zhou, 2008). However, as a result of their human capital investment, proper educational attainment tended to mediate the inequalities of obtaining opportunities to open their businesses and make use of their ethnic networks or ties.

On the other hand, the results of logistic regression analysis also addressed cultural diversity and inequalities among immigrants. Being from the Korean, Vietnamese, and “All other Asian immigrant” groups provided a strong explanation for self-employment. Being from these ethnic groups increased the chance of being self-employed, because membership of these ethnic groups presented difficulties in obtaining job opportunities due to a lack of human capital. As a result, these ethnic groups were more likely to choose self-employment by appropriate use of ethnic ties or networks in one of the social capital forms.

Filipinos, on the other hand, were less likely to be self-employed. Filipinos had higher human capital with respect to English proficiency, and they tended to acquire paid employment without using their social capital. As a result, they were less likely to be self-employed in Hawaii than members of “other Asian immigrant” groups. Similarly, Japanese were less likely to be self-employed. Since those who have higher human capital were able to take advantage of their human capital, they tended to get job opportunities more easily.

Finally, the findings offered a strong argument that the American labor market values human capital in immigrants up to a maximum age of 50.5 years. Overall, regardless of the educational attainment, immigrants, took advantage of their social, cultural, and family resources to become self-employed. Even though they did not speak English fluently and did not have citizenship, they took advantage of their social, cultural, and family resources to become self-employed.

Limitation and Future Directions One limitation of this study was that secondary data analysis was used.

Primary data or additional qualitative data may have provided more in-depth


information regarding the various strategies used to realize the value of social capital in a social context.

Second, the current study addressed some of the social capital measures (e.g., family networks, friendship network, or ethnic network or ties) and how they may have influenced social, cultural, and family resources. However, any measurement of social capital relied on the researcher’s theory and conceptual framework. Therefore, further research is required to focus more deeply on other variables of social capital.

Third, families may have stayed longer in a community and may have greater social capital due to having friends and relatives nearby. However, they may also have remained isolated from the wider community and, therefore, be deprived of sources of important information and employment opportunities (Wilson, 1987). Thus, what is needed was a model that explains different ethnic networks or ties in a community and how those networks are linked, according to social capital.

Finally, the quantitative method was used in this study. To understand more fully the characteristics and patterns of self-employment among immigrant groups in Hawaii, further research was recommended utilizing qualitative methods such as individual interviews or focus groups.

Conclusion

This study examined the influence of social capital on self-employment in Hawaii by using data from the U.S. Census for 2000. The results indicated that social capital, such as family resources and the length of stay in the U.S., had a positive impact on the likelihood of self-employment. Despite being isolated from the American labor market, the immigrants took advantage of ethnic networks or ties to the labor market in their community in order to open their own businesses. Recent immigrants seemed to have fewer connections with the labor market. However, they managed to establish their social capital after they arrive in the U.S. For this reason, immigrants who have lived in the U.S. for more than five years were more likely to become self-employed than are those who have emigrated within the past five years. In addition, these immigrants managed to establish their social capital through their family resources. For example, if they have children, they were able to establish their social capital through their children by further establishing potential or actual resources through their children’s networks or connections.

These findings, such as staying in the U.S. for more than five years and family characteristics also identified characteristics of self-employment of non-U.S.-born Japanese, Chinese, Koreans, Filipinos, Vietnamese, “All other Asian immigrants,” Native Hawaiians and Pacific Islanders, and “All other immigrants.” Although the majority of native-born Americans in Hawaii were those of Japanese, Chinese, Korean, Filipino, and/or Vietnamese origins, these findings indicated that immigrants who come from these countries do not always take advantage of their ethnic networks, ties or cultural norms and values to access the ethnic labor market in their community in the U.S. However, after human capital investment (improving English proficiency, educational attainment, and obtaining citizenship), members of Korean and Vietnamese immigrant groups were more likely to become self-employed.

This study addressed the influence of social capital on self-employment among immigrants. Even though immigrants started a new life after immigration to the U.S.,


they managed to establish and make use of their social capital to open their own businesses. Furthermore, the cultural diversity in ethnicity-oriented social capital for the eight ethnic groups addressed the unique characteristics and patterns of self-employment. Further, the results recognized cultural diversity and identify strategies to obtain opportunities to become self-employed.


References

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Table 1: Descriptive Statistics by Ethnic Group based on the data from U.S. Census Bureau, 2000

Variable Japanese Chinese Koreans Filipinos Vietnamese All Other Asian Immi-grants

Native Hawaiian and Pacific Islanders

All Other Immi-grants

Americans

Self-Employed (Percent)

11.1 16.0 20.4 4.9 23.1 18.1 12.4 18.4 9.8

Social and Cultural Resources

Extended Family (Percent)

5.8 12.0 7.2 29.0 10.0 9.8 13.8 2.9 10.5

Length of Stay (Mean)

19.3 18.2 18.7 17.3 15.8 17.6 18.7 20.2 ---

Family Resources

Separated (Percent)

2.0 1.5 3.3 1.6 1.5 0.5 1.4 4.2 1.7

Divorced (Percent)

12.6 5.3 13.5 3.8 6.2 8.4 8.6 16.2 10.6

Widowed (Percent)

3.8 2.4 2.4 3.6 2.3 2.3 2.4 1.3 1.2


Never Married (Percent)

15.6 20.1 19.5 19.2 22.3 26.5 27.4 17.8 32.1

Presence of Children < 18 (Mean)

3.35 3.19 3.18 3.02 2.92 2.92 2.9 3.09 3.09

Number of Children < 18 (Mean)

0.46 0.6 0.6 0.92 0.88 0.81 0.97 0.6 0.68

Individual Resources

English Proficiency (Mean)

0.81 0.69 0.77 0.85 0.68 0.84 0.93 0.96 1.00

High School Graduate (Percent)

24.4 15.8 28.7 28.0 27.0 21.4 32.0 22.6 28.2

More than One Year of College (Percent)

18.4 16.5 28.1 21.1 15.0 21.9 24.1 24.8 27.6

College Graduate (Percent)

43.8 24.9 21.6 24.2 16.2 26.5 19.5 31.4 29.5

More than College

6.0 12.3 6.6 2.0 6.2 10.2 4.5 15.4 9.6


Graduate (Percent)

Citizenship (Percent)

38.3 74.6 69.2 68.5 81.0 58.1 58.3 42.1 100.0

Control Variables

Age (Mean)

43.9 42.7 41.5 41.6 40 38.1 38.3 42 39.2

Female (Percent)

67.0 52.5 63.5 53.6 51.0 52.1 43.0 44.0 45.0


Table 2: Odds Ratios for Self-Employment on Selected Independent Variables

Independent Variables Model 1 Model 2 Model 3

Social and Cultural Resources Americans --- --- ---

Japanese 0.65* 0.51** 0.75

Chinese 1.06 0.87 1.20

Koreans 1.40* 1.20 1.80**

Filipinos 0.31** 0.28** 0.36**

Vietnamese 1.81** 1.63** 2.37**

All Other Asian Immigrants

1.26 1.11 1.74**

Native Hawaiian and Pacific Islanders

0.79 0.72 1.02

All Other Immigrants 1.14 0.92 1.30

Length of Stay 1.03** 1.02** 1.01**

Presence of Extended Family

0.64** 0.60** 0.68*

Family Resources

Married --- ---

Widowed 1.05 1.06

Divorced 1.10 1.11

Separated 0.80 0.87

Never Married (Single) 0.45** 0.86*

Presence of Children < 18 1.20** 1.10**

Number of Children < 18 1.08** 1.10**

Individual Resources

English Proficiency 1.03

Less than High School Graduate

---

High School Graduate 0.77**

More than One Year of College

1.02


College Graduate 0.82*

More than College Graduate

1.08

Citizenship 0.83

Control Variables

Age 1.22**

Age-Squared 1.00**

Male ---

Female -2.18 -2.07 0.66**

Intercept 17243.68 16833.13 -7.05

-2 Log-likelihood 10 22 16267.05

Degrees of freedom 27047 27047 25

N 27047 *p< 0.05, **< 0.01

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