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Changing Patterns of Ethnic Minority Self-Employment in Britain: Evidence from Census Microdata

Author

Listed:
  • Clark, Ken

    () (University of Manchester)

  • Drinkwater, Stephen

    () (University of Roehampton)

Abstract

The over-representation of certain ethnic minority and immigrant groups in self-employment is, in common with other developed countries, a notable feature of the UK labour market. Compared to substantial growth in self-employment in the 1980s, the 1990s saw overall self-employment rates plateau. Despite this, some minority groups experienced continued growth whilst others, particularly Chinese and Indian males and Pakistani, Bangladeshi and Chinese females, saw their self-employment rates decline. In this paper we use microdata samples from the 1991 and 2001 Censuses to investigate the trends in ethnic entrepreneurship. Using decomposition methods we find that, for males from the Asian groups, changes in observable characteristics associated with an increasing proportion of second generation individuals explain much of the decline in self-employment. This, which is also true of Chinese females, reflects in part the age structure and educational experiences of the second generation. The dynamics of Black male and Pakistani/Bangladeshi female entrepreneurship are less easy to explain. We also find that, while there is no evidence of self-employment being an “enclave” phenomenon, local economic conditions do affect rates of entrepreneurship for some groups, notably Pakistanis and Bangladeshis.

Suggested Citation

  • Clark, Ken & Drinkwater, Stephen, 2006. "Changing Patterns of Ethnic Minority Self-Employment in Britain: Evidence from Census Microdata," IZA Discussion Papers 2495, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2495
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    References listed on IDEAS

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    1. Kenneth Clark & Stephen Drinkwater, 2002. "Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 5-29.
    2. William E. Even & David A. Macpherson, 1993. "The Decline of Private-Sector Unionism and the Gender Wage Gap," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 279-296.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
    5. Simon C. Parker & Yacine Belghitar & Tim Barmby, 2005. "Wage Uncertainty and the Labour Supply of Self-Employed Workers," Economic Journal, Royal Economic Society, vol. 115(502), pages 190-207, March.
    6. Trevor Jones & Monder Ram & Paul Edwards, 2006. "Ethnic minority business and the employment of illegal immigrants," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 18(2), pages 133-150, March.
    7. Clark, Kenneth & Drinkwater, Stephen, 1998. "Ethnicity and Self-Employment in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(3), pages 383-407, August.
    8. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September.
    9. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632.
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    Cited by:

    1. Ken Clark & Stephen Drinkwater, 2010. "Patterns of ethnic self-employment in time and space: evidence from British Census microdata," Small Business Economics, Springer, vol. 34(3), pages 323-338, April.
    2. Sari Pekkala Kerr & William R. Kerr, 2016. "Immigrant Entrepreneurship," NBER Chapters,in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 187-249 National Bureau of Economic Research, Inc.
    3. Kahanec, Martin & Mendola, Mariapia, 2007. "Social Determinants of Labor Market Status of Ethnic Minorities in Britain," IZA Discussion Papers 3146, Institute for the Study of Labor (IZA).
    4. 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.
    5. Robert W. Fairlie & Julie Zissimopoulos & Harry Krashinsky, 2010. "The International Asian Business Success Story? A Comparison of Chinese, Indian and Other Asian Businesses in the United States, Canada and United Kingdom," NBER Chapters,in: International Differences in Entrepreneurship, pages 179-208 National Bureau of Economic Research, Inc.
    6. Robert W. Fairlie & Harry A. Krashinsky & Julie Zissimopoulos & Krishna B. Kumar, 2013. "Indian Entrepreneurial Success in the United States, Canada and the United Kingdom," CESifo Working Paper Series 4510, CESifo Group Munich.

    More about this item

    Keywords

    ethnicity; entrepreneurship; self-employment; immigrants;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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