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What Makes an Entrepreneur and Does it Pay? Native Men, Turks and Other Migrants in Germany

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  • Constant, Amelie
  • Shachmurove, Yochanan
  • Zimmermann, Klaus F

Abstract

This Paper focuses on the entrepreneurial endeavors of immigrants and natives in Germany. We pay closer attention to Turks, since they are the largest immigrant group with a strong entrepreneurial tradition; self-employed Turks in Germany represent about 70% of all Turkish entrepreneurs in the European Union. We identify the characteristics of self-employed individuals and understand their underlying drive into self-employment. At the same time we investigate how immigrant entrepreneurs fare in the labour market compared to natives. Employing data from the German Socioeconomic Panel 2000 release we find that the probability of self-employment increases significantly with age for all groups albeit at a decreasing rate. Among immigrants, Turks are twice as likely to choose self-employment as any other immigrant group. The age-earnings profiles of self-employed German and immigrant men are concave and surprisingly similarly shaped. While for self-employed German men hours of work and Treiman prestige scale scores increase their earnings, for self-employed immigrant men it is the longevity of the business that makes a difference. Everything else equal, the earnings of self-employed Turks are no different from the earnings of the self-employed Greeks, Italians, Spaniards, ex-Yugoslavs, Polish or other East Europeans, including those immigrants who have become German citizens.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4207.

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Date of creation: Jan 2004
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Handle: RePEc:cpr:ceprdp:4207

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Keywords: entrepreneurship; immigrants; occupational choice; self-employment; wage differentials;

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References

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  1. Magnus Lofstrom, 2002. "Labor market assimilation and the self-employment decision of immigrant entrepreneurs," Journal of Population Economics, Springer, vol. 15(1), pages 83-114.
  2. Pfeiffer, Friedhelm & Reize, Frank, 1998. "Business Start-ups by the Unemployed - an Econometric Analysis Based on Firm Data," ZEW Discussion Papers 98-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  9. 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.
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Citations

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Cited by:
  1. Mueller, Elisabeth, 2011. "Entrepreneurs from low-skilled immigrant groups in knowledge-intensive industries - company characteristics, survival and innovative performance," ZEW Discussion Papers 11-030, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Yochanan Shachmurove, 2007. "Geography and Industry Meets Venture Capital," PIER Working Paper Archive 07-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  3. Y Georgellis & J G Sessions & N Tsitsianis, 2005. "Self-Employment Longitudinal Dynamics: A Review of the Literature," Economic Issues Journal Articles, Economic Issues, vol. 10(2), pages 51-84, September.
  4. Amelie Constant & Klaus F. Zimmermann, 2004. "Self-Employment Dynamics across the Business Cycle: Migrants versus Natives," Discussion Papers of DIW Berlin 455, DIW Berlin, German Institute for Economic Research.
  5. Constant, Amelie F., 2004. "Immigrant versus Native Businesswomen: Proclivity and Performance," IZA Discussion Papers 1234, Institute for the Study of Labor (IZA).
  6. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Report No. 41: Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute for the Study of Labor (IZA).
  7. repec:dgr:uvatin:2009047 is not listed on IDEAS
  8. Joachim Ragnitz & Stefan Eichler & Beate Grundig & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, Ifo Institute for Economic Research at the University of Munich, number 41, October.
  9. Yochanan Shachmurove, 2009. "Economic Geography, Venture Capital and Focal Points of Entrepreneurial Activity," PIER Working Paper Archive 09-032, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  10. Yochanan Shachmurove, 2006. "An Excursion into the Venture Capital Industry Stratified by Locations and Industries 1996-2005," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(3), pages 79-104, Fall.
  11. S. Longhi & P. Nijkamp & J. Poot, 2010. "Joint impacts of immigration on wages and employment: review and meta-analysis," Journal of Geographical Systems, Springer, vol. 12(4), pages 355-387, December.

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