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The low incomes of self-employed immigrants in Denmark and Sweden

  • Pernilla Andersson
  • Eskil Wadensjo

In this paper we analyse the incomes of self-employed in Denmark and Sweden and ask if there exist income differences between natives and immigrants. The OLS-estimates show that non-western immigrants have significantly lower annual incomes than their native counterparts. We then estimate quantile regressions and find that the difference between natives and non-Western immigrants is significantly smaller among those with high incomes (90th percentile) compared to those with low incomes (10th percentile). One explanation for this result may be that immigrants charge a lower price for their goods and services due to discriminatory behaviour among customers. Another explanation may be that non-Western immigrants have a lower reservation wage and hence accept to stay in business receiving a lower profit.

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File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/11985/1/ber-0321.pdf
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Article provided by ULB -- Universite Libre de Bruxelles in its journal Brussels economic review.

Volume (Year): 48 (2005)
Issue (Month): 1-2 ()
Pages: 43-72

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Handle: RePEc:bxr:bxrceb:y:2005:v:48:i:1-2:p:43-71
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