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Labor market assimilation and the self-employment decision of immigrant entrepreneurs

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  • Magnus Lofstrom

    ()
    (University of California, Irvine, School of Social Sciences, 3151 Social Science Plaza, Irvine CA 92697-5100, USA)

Abstract

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Self-employed immigrants are found to do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives' wage/salary earnings at about age 30 and natives' self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrant-native earnings gap by, on average, 14%.

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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 15 (2002)
Issue (Month): 1 ()
Pages: 83-114

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Handle: RePEc:spr:jopoec:v:15:y:2002:i:1:p:83-114

Note: Received: 10 November 1999/Accepted: 3 August 2000
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Keywords: Immigration; assimilation; self-employment;

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  1. George J. Borjas & Stephen G. Bronars, 1990. "Immigration and the Family," NBER Working Papers 3509, National Bureau of Economic Research, Inc.
  2. Fairlie, Robert, 2014. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Santa Cruz Department of Economics, Working Paper Series qt24p7v6gc, Department of Economics, UC Santa Cruz.
  3. Andrew M. Yuengert, 1995. "Testing Hypotheses of Immigrant Self-Employment," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 194-204.
  4. Julian R. Betts & Magnus Lofstrom, 2000. "The Educational Attainment of Immigrants: Trends and Implications," NBER Chapters, in: Issues in the Economics of Immigration, pages 51-116 National Bureau of Economic Research, Inc.
  5. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  6. Robert W. Fairlie & Bruce D. Meyer, 1994. "The Ethnic and Racial Character of Self-Employment," NBER Working Papers 4791, National Bureau of Economic Research, Inc.
  7. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  8. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September.
  9. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
  10. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  11. Carliner, Geoffrey, 1980. "Wages, Earnings and Hours of First, Second, and Third Generation American Males," Economic Inquiry, Western Economic Association International, vol. 18(1), pages 87-102, January.
  12. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
  13. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
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