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The predicted earnings differential and immigrant self-employment in Sweden

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  • Mats Hammarstedt

Abstract

This paper investigates the influence of the predicted earnings differential between self-employment and wage-employment on self-employment propensities among immigrants in Sweden. Immigrants from non-European countries have essentially lower earnings from self-employment and wage-employment than immigrants from European countries. It is found that the difference between an immigrant's predicted earnings in self- and wage-employment has a strong influence on an immigrant's self-employment decision. A one unit increase in the log differential between self-employment and wage-employment earnings increase the self-employment rate among immigrants by about 5 percentage points, suggesting that discriminatory wages in the wage-employment sector may push immigrants towards self-employment.

Suggested Citation

  • Mats Hammarstedt, 2006. "The predicted earnings differential and immigrant self-employment in Sweden," Applied Economics, Taylor & Francis Journals, vol. 38(6), pages 619-630.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:6:p:619-630
    DOI: 10.1080/00036840500397069
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    Citations

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    Cited by:

    1. Altin Vejsiu, 2011. "Incentives to self-employment decision in Sweden," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(4), pages 379-403.
    2. Lina Aldén & Mats Hammarstedt, 2016. "Discrimination in the Credit Market? Access to Financial Capital among Self-employed Immigrants," Kyklos, Wiley Blackwell, vol. 69(1), pages 3-31, February.
    3. Theodore Lianos & Anastasia Pseiridis, 2009. "On the occupational choices of return migrants," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(2), pages 155-181, March.
    4. Hedberg, Charlotta, 2009. "Intersections of Immigrant status and Gender in the Swedish Entrepreneurial Landscape," SULCIS Working Papers 2009:8, Stockholm University, Linnaeus Center for Integration Studies - SULCIS.
    5. Frank M. Fossen, 2012. "Gender differences in entrepreneurial choice and risk aversion -- a decomposition based on a microeconometric model," Applied Economics, Taylor & Francis Journals, vol. 44(14), pages 1795-1812, May.
    6. Lina Andersson & Mats Hammarstedt & Shakir Hussain & Ghazi Shukur, 2013. "Ethnic origin, local labour markets and self-employment in Sweden: a multilevel approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 885-910, June.
    7. repec:kap:compec:v:50:y:2017:i:3:d:10.1007_s10614-016-9592-1 is not listed on IDEAS
    8. Claudio Mancilla & Yancy Vaillant & Esteban Lafuente, 2011. "HOW ENTREPRENEURIALLY INFLUENTIAL SOCIAL TRAITS AFFECT BUSINESS CREATION AMONGST RURAL IMMIGRANTS: Evidence from Spain," ERSA conference papers ersa10p1464, European Regional Science Association.
    9. Helena Svaleryd, 2015. "Self-employment and the local business cycle," Small Business Economics, Springer, vol. 44(1), pages 55-70, January.
    10. Lina Andersson & Mats Hammarstedt, 2011. "Transmission of self-employment across immigrant generations: the importance of ethnic background and gender," Review of Economics of the Household, Springer, vol. 9(4), pages 555-577, December.
    11. Ali M Ahmed & Lina Andersson & Mats Hammarstedt, 2009. "Ethnic Discrimination in the Market Place of Small Business Transfers," Economics Bulletin, AccessEcon, vol. 29(4), pages 3050-3058.
    12. Williams, Donald R., 2012. "Gender discrimination and self-employment dynamics in Europe," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 153-158.
    13. Lina Andersson & Mats Hammarstedt, 2010. "Intergenerational transmissions in immigrant self-employment: Evidence from three generations," Small Business Economics, Springer, vol. 34(3), pages 261-276, April.
    14. Moral-Arce, Ignacio & Martín-Román, Javier & Martín-Román, Ángel L., 2018. "Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation," MPRA Paper 85111, University Library of Munich, Germany.
    15. Andersson Joona, Pernilla & Wadensjö, Eskil, 2006. "Employees Who Become Self-Employed: Do Labour Income and Wages Have an Impact?," IZA Discussion Papers 1971, Institute for the Study of Labor (IZA).
    16. Lina Andersson, 2011. "Occupational choice and returns to self-employment among immigrants," International Journal of Manpower, Emerald Group Publishing, vol. 32(8), pages 900-922, November.
    17. L. Behrenz & L. Delander & J. Månsson, 2016. "Is Starting a Business a Sustainable way out of Unemployment? Treatment Effects of the Swedish Start-up Subsidy," Journal of Labor Research, Springer, vol. 37(4), pages 389-411, December.

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