The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?
AbstractThis paper uses a state of the art three-stage estimation technique to identify the determinants of the self-employed immigrant and native men in Germany. Their making is surprisingly alike. Employing data from the German Socioeconomic Panel 2000 (GSOEP) release we find that self-employment is not significantly affected by exposure to Germany or by human capital. But this choice has a very strong intergenerational link and it is also related to homeownership and financial worries. While individuals are strongly pulled into self-employment if it offers higher earnings, immigrants are additionally pushed into self-employment when they feel discriminated. Married immigrants are more likely to go into self-employment, but less likely when they have young children. Immigrants with foreign passports living in ethnic households are more likely self-employed than native Germans. The earnings of self-employed men increase with exposure to Germany, hours worked and occupational prestige; they decrease with high regional unemployment to vacancies ratios. Everything else equal, the earnings of self-employed Germans are not much different from the earnings of the self-employed immigrants, including those who have become German citizens. However, immigrants suffer a strong earnings penalty if they feel discriminated against while they receive a premium if they are German educated. Copyright Springer 2006
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Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 26 (2006)
Issue (Month): 3 (04)
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Web page: http://www.springerlink.com/link.asp?id=100338
Entrepreneurship; immigrants; occupational choice; self-employment; wage differentials; J23; M13; J24; J61; J31;
Other versions of this item:
- Constant, Amelie F. & Zimmermann, Klaus F., 2004. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," IZA Discussion Papers 1440, Institute for the Study of Labor (IZA).
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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