| This paper studies the relationship between ethnicity and occupational choice. Several immigrant groups in the United States cluster in very specific business sectors. Koreans are, for example, 40 times more likely than other immigrants to operate dry cleaning shops, and Gujarati-speaking Indians are 70 times more likely to manage motels. I develop a model of social interactions where relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent both with Census data on immigrant occupations, as well as with the reoccurring historical phenomenon of small, specialized groups, such as the Jews and the overseas Chinese, achieving considerable economic success in spite of market discrimination. |
