Data from a longitudinal sample of Cuban CmigrCs are used to test competing hypotheses about the mode of incorporation of new immigrants into the U.S. labor market. Classic theories of assimilation assumed a unified economy in which immigrants started at the bottom and gradually moved up occupationally, while they gained social acceptance. Recent dual labor market theories define new immigrants mainly as additions to the secondary labor market linked with small peripheral firms. Multivariate analyses confirm the existence of the primary/secondary dichotomy but add to it a third alternative condition. This is the enclave economy associated with immigrant-owned firms. While most immigrant enterprises are small, competitive ones, enclave workers show distinct characteristics, including a significant return to past human capital investments. Such a return is absent among immigrant workers in the secondary labor market. Causes and implications of these findings are discussed. The purpose of this study is to examine the extent to which the phenomenon of self-enclosed minorities modifies general labor processes in the U.S. economy. Empirical data with which to address this question come from a sample of recently arrived Cuban CmigrCs. The classic sociological literature on immigrant minorities uniformly portrayed the adaptation process as one in which initial economic hardships and discrimination gave way to gradual acceptance by members of the dominant groups and eventual assimilation. With minor variations, different authors identified the culmination of the process as the entrance of immigrants, or their descendants, into the mainstream of the economy and their cultural fusion with the majority (Handlin
