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Occupational choice and returns to self-employment among immigrants

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  • Lina Andersson
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    Abstract

    Purpose – Self-employment has been stressed as a way for immigrants to enter and improve their situation in the labour market. However, research shows that some people who become self-employed revert to wage employment or unemployment. The purpose of the paper is to study the labour market consequences of temporary self-employment on paid employment among immigrants. Design/methodology/approach – The paper uses micro-econometric methods to estimate the effect of self-employment, relative to continued wage employment, on earnings and employment opportunities in 2006. The paper also identifies the type of wage earner that temporarily enters self-employment. Findings – The paper finds that, relative to continued wage employment, self-employment, with few exceptions, does not improve outcomes in the wage sector of immigrants and may in fact be associated with lower earnings and difficulties in returning to paid employment. Practical implications – The results indicate that encouraging immigrant wage earners to become self-employed should be done with care, since self-employment does not necessarily improve subsequent labour market outcomes. Originality/value – This study will be valuable to those who are interested in the economic consequences of immigrant self-employment.

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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

    Volume (Year): 32 (2011)
    Issue (Month): 8 (November)
    Pages: 900-922

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    Handle: RePEc:eme:ijmpps:v:32:y:2011:i:8:p:900-922

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    Related research

    Keywords: Earnings; Immigrants; Occupational choice; Self-employment; Sweden;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Pernilla Andersson & Eskil Wadensjö, 2007. "Do the unemployed become successful entrepreneurs?," International Journal of Manpower, Emerald Group Publishing, vol. 28(1), pages 604 - 626, October.
    2. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September.
    3. Evgueni Vinogradov & Espen J. Isaksen, 2008. "Survival Of New Firms Owned By Natives And Immigrants In Norway," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 21-38.
    4. Mats Hammarstedt, 2006. "The predicted earnings differential and immigrant self-employment in Sweden," Applied Economics, Taylor & Francis Journals, vol. 38(6), pages 619-630.
    5. Mats Hammarstedt, 2004. "Self-Employment Among Immigrants in Sweden -- An Analysis of Intragroup Differences," Small Business Economics, Springer, vol. 23(2), pages 115-126, 09.
    6. Mats Hammarstedt, 2009. "Predicted earnings and the propensity for self-employment: Evidence from Sweden," International Journal of Manpower, Emerald Group Publishing, vol. 30(4), pages 349-359, July.
    7. Amelie Constant & Klaus Zimmermann, 2006. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," Small Business Economics, Springer, vol. 26(3), pages 279-300, 04.
    8. Mats Hammarstedt & Ghazi Shukur, 2006. "Immigrants' Relative Earnings in Sweden - A Cohort Analysis," LABOUR, CEIS, vol. 20(2), pages 285-323, 06.
    9. Ken Clark & Stephen Drinkwater, 2009. "Immigrant self-employment adjustment: Ethnic groups in the UK," International Journal of Manpower, Emerald Group Publishing, vol. 30(1/2), pages 163-175, May.
    10. Bruce, Donald & Schuetze, Herbert J., 2004. "The labor market consequences of experience in self-employment," Labour Economics, Elsevier, vol. 11(5), pages 575-598, October.
    11. Hyytinen, Ari & Rouvinen, Petri, 2008. "The labour market consequences of self-employment spells: European evidence," Labour Economics, Elsevier, vol. 15(2), pages 246-271, April.
    12. Carlsson, Magnus & Rooth, Dan-Olof, 2007. "Evidence of ethnic discrimination in the Swedish labor market using experimental data," Labour Economics, Elsevier, vol. 14(4), pages 716-729, August.
    13. Williams, Donald R., 2000. "Consequences of self-employment for women and men in the United States," Labour Economics, Elsevier, vol. 7(5), pages 665-687, September.
    14. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
    15. Clain, Suzanne Heller, 2000. "Gender differences in full-time self-employment," Journal of Economics and Business, Elsevier, vol. 52(6), pages 499-513.
    16. Mats Hammarstedt & Ghazi Shukur, 2009. "Testing the home-country self-employment hypothesis on immigrants in Sweden," Applied Economics Letters, Taylor & Francis Journals, vol. 16(7), pages 745-748.
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