Labor Market Assimilation and the Self-Employment Decision of Immigrant Entrepreneurs
AbstractThis 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. Variables for the proportion of immigrants in the population and average earnings ratios are used as instruments to control for self-selection into self-employment and consequently identify the inverse Mills correction term in the earnings models. Self-employed immigrants 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, roughly 14 percent.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 54.
Length: 56 pages
Date of creation: Aug 1999
Date of revision:
Publication status: published in: Journal of Population Economics, 2002, 15 (1), 83-114
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- 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.
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, and Immigrants; Non-labor Discrimination
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
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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