Understanding Immigrant Self-Employment in Sweden: Insights from the Literature

We present results from research on different dimensions of immigrant self-employment in Sweden. There are variations in self-employment rates between different groups of immigrants and the native population. Self-employment rates have increased markedly among certain groups of immigrants since the 1990s. Immigrants from certain countries in the Middle East are over-represented in self-employment, while self-employment rates among immigrants from countries in Africa are relatively low. Immigrants from countries outside Europe are often self-employed in branches with low entry barriers. Exit rates from self-employment are generally higher, and earnings are lower among self-employed non-European immigrants than among self-employed natives and European immigrants. Research regarding explanations for why immigrants opt for self-employment is presented. Results indicate that immigrants are pushed into self-employment due to low earnings in wage-employment. As regards the effects of ethnic enclaves, networks, and traditions from their home countries, the results are inconclusive. Family traditions and parental role models increase self-employment propensities more for immigrants than for natives. Non-European immigrants report that they encounter other difficulties and obstacles in their business activities than natives and European immigrants. They consider lack of access to financial capital and discrimination from banks, customers, and suppliers as obstacles for successful self-employment. Finally, results show that immigrants who are successful in their business activities may play an important role for labor market integration since they create employment opportunities also for other immigrants.