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

Author

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  • Pernilla Andersson
  • Eskil Wadensjo

Abstract

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.

Suggested Citation

  • Pernilla Andersson & Eskil Wadensjo, 2005. "The low incomes of self-employed immigrants in Denmark and Sweden," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 48(1-2), pages 43-72.
  • Handle: RePEc:bxr:bxrceb:y:2005:v:48:i:1-2:p:43-71
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    More about this item

    Keywords

    Self-employed; Immigrant worker; Income distribution; Quantile regressions;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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