Maude Toussaint-Comeau

The Importance of Check-Cashing Businesses to the Unbanked: Racial/Ethnic Differences

The roughly 9.5 percent of all U.S. families that are without some type of transaction account (unbanked) are disproportionately represented by minorities. The unbanked often must rely on alternative ways to carry out basic financial transactions such as cashing payroll checks and paying bills. This study analyzes unique survey data and finds that a consumers decision to patronize check-cashing businesses is jointly made with the decision to be unbanked. For the unbanked, these businesses are an important source for financial services. Attributes that contribute to these decisions, however, vary for each racial/ethnic group. Latent preference effects are also observed to influence this joint decision for Blacks and Hispanics. These findings may explain in part why the provisions of the Debt Collection Improvement Act (DCIA) of 1996 have not been more successful in bringing unbanked federal benefits recipients into the financial mainstream. ; Consumer participation in mainstream financial markets can improve their ability to build assets and create wealth, protect them from theft and discriminatory, predatory or unsavory lending practices, and may promote economic stability and vitality in the communities where they reside. By more fully understanding a consumers financial decisions, policies can be better directed to improve the effectiveness of legislation such as the DCIA of 1996 in encouraging mainstream financial market participation.

Inclusive Cluster-Based Development Strategies for Inner Cities A Conference Summary

The extensive adoption of the industry cluster-based approach to economic development as popularized by Michael Porter calls for the examination of the expected benefits for inner cities. Clusters encourage practitioners to view regional economies in terms of groupings of related firms and supporting infrastructure, and to link economic development with workforce development and business support strategies. On September 15-16, 2015 researchers and practitioners gathered in Detroit for the Inner City Economic Summit, to share knowledge and experiences regarding strategies that can help drive economic growth in inner cities. In this conference summary, we analyze the findings and discussions of that meeting for the special edition of the Economic Development Quarterly May 2016 publication. The research findings presented at the summit suggest that agglomeration economies can foster employment growth in inner cities. Evidence also suggests that human capital development and a supportive business ecosystem, including better access to financing for minority entrepreneurs in inner cities, are important ingredients for a cluster-centered policy framework. The discussions at the summit underscore that industry cluster-based development strategies can be an effective intervention for change for distressed communities when they link to effective workforce training and business development programs.

The Impact of Mexican Immigrants on U.S. Wage Structure

Previous study by Card and Lewis (2005) has found (puzzling) that inflows of Mexican immigrants into “new” metropolitan areas have had no effect on the relative wages of very low-skill (high school dropouts). Rather, Mexican workers do affect relative wages for high school graduates. Whereas Card and Lewis’ study uses variations across geographies, this paper considers variations across occupations. Recognizing that Mexican immigrants are highly occupationally clustered (disproportionately work in distinctive “very low wage” occupations), we use this fact to motivate the empirical approach to analyze the relationship between the composition of Mexican immigrants across occupations/industries and average wages in the occupations/industries. To summarize our finding, we confirm that in spite of the fact that Mexican immigrants are disproportionately in “very low skill” occupations, (which we define as occupations where the average workers have no high school education), we find no significant impact of Mexican immigrants on wages in those occupations. By contrast, inflows of Mexican immigrants have some small effects on the wages of native workers in “low skill” occupations (which we define as occupations where the average worker has at least some high school education or is a high school graduate). These results suggest potential “spill over effects” as natives may be reallocating their labor supply into non-predominant Mexican occupations. An analysis of employment changes of natives into different occupation groupings in response to an inflow of Mexican immigrants, confirms that natives’ employment in occupations where the average worker has a high school education increases in response to Mexican inflows in the U.S labor force from previous periods.

Do Enclaves Matter in Immigrants' Self-Employment Decision?

This paper uses 2000 U.S. Census data to study the determinants of self-employment decisions among immigrants. It outlines a theoretical framework for analyzing the role of ethnic enclaves in the self-employment decision of immigrants that captures nuances involved in the interaction between ethnic enclaves and different ethnic groups. It assesses the effect of ethnic enclaves for different groups and explores explanations for differences. The results show that higher ethnic concentration in metropolitan areas is positively related to the probability of self-employment of immigrants. However, the significance of ethnic concentration for self-employment differs by the country or region of origin of immigrants. The relationship between location and self-employment probability of immigrants is reinforced by other metropolitan area-specific characteristics that include labor market factors, such as the unemployment rate, the self-employment rate, the monetary returns to self-employment relative to wage employment, and the success of self-employed co-ethnic members.