High Rates Of Self-employment Research Articles

Too Cold to Venture There? January Temperature and Immigrant Self-Employment Across the United States

Immigrants in the United States have higher self-employment rates than native-born Americans. However, immigrant self-employment rates vary considerably across areas of the country. The authors examine the percentage of immigrant workers in local areas who are self-employed (i.e., the self-employment rate for the foreign born). Areas with colder winter temperatures have especially low self-employment rates among their immigrant populations compared to warmer areas. The relationship between winter temperature and immigrant self-employment persists after controlling for numerous individual and local area characteristics. The relationship holds for numerous subsamples of immigrants but is strongest for immigrants arriving to the United States as adults. Child immigrants and native-born Americans exhibit a weaker relationship, possibly because of previous exposure and attachment to particular locations chosen by their parents that constrain the migration responses of potential entrepreneurs. Entrepreneurial immigrants arriving to the country as adults appear especially footloose and particularly responsive to January temperatures in their location decisions.

The within occupation and industry component of the immigrant-native gap in U.S. self-employment rates

ABSTRACT This paper examines whether the higher self-employment rates among U.S. immigrants, relative to native-born Americans, can be accounted for by immigrants being over-represented in occupations and industries that are commonly pursued through self-employment. After accounting for detailed occupations and industries, approximately 58% of the immigrant-native gap in self-employment rates remains. This finding suggests that the higher self-employment rate among immigrants is driven by factors that influence the likelihood of pursuing self-employment in and of itself, rather than factors that act indirectly by driving immigrants towards occupations and industries that are commonly associated with self-employment.

Do regional self-employment rates converge in the UK? Empirical evidence using club-clustering algorithm

This paper examines the dynamics of self-employment rates overall and by gender across the UK during the period 2004–2016. Specifically, using the panel convergence methodology suggested by Phillips and Sul (Econometrica 75:1771–1855, 2007) we investigate whether self-employment rates can be characterised by a process where all regions tend to the same equilibrium (global or full convergence) or, if not, whether there are one or more clusters of regions with the same equilibrium (convergence clubs). We find that there is no global regional convergence in total and gender-specific self-employment rates. However, two convergence clubs of regions with lower self-employment rates are found along with a group of non-convergent regions which have higher self-employment rates and somewhat higher rates of growth in self-employment. We also show that gender differences in convergence patterns across UK exist.

Personal Wealth and Self-Employment

We examine how wealth windfalls affect self-employment decisions using data on cash payments from claims on Texas shale drilling to people throughout the United States. Individuals who receive large wealth shocks (greater than $50,000) have 51% higher self-employment rates. The increase in self-employment rates is driven by individuals who lengthen existing self-employment spells, and not by individuals who leave regular employment for self-employment. Moreover, the effect of wealth reverts for individuals whose payments run out. Rather than alleviating a financial constraint, our evidence suggests that unrestricted cash windfalls affect self-employment decisions primarily through self-employment’s non-pecuniary benefits.

Two decades of European self-employment: Is the answer to who becomes self-employed different over time and countries?

•The gender gap in Old Europe has diminished significantly and is estimated to be as low as 6–7%.•The gender gap in New Europe remains large and could be as high as four times that in Old Europe.•The propensity to become self-employed increases in age past the common retirement age of 65.•The education structure of the self-employed is such that the lowest and highest educated both prefer self-employment.•Political and economic turmoil takes a generation to work its way through the system, but it is associated with higher rates of self-employment.

Wage Employment, Unemployment and Self-Employment Across Countries

Poor countries have low rates of wage employment and high rates of self-employment. This paper shows that they also have high rates of unemployment relative to wage employment, and that self-employment is particularly high where the unemployment-wage employment ratio is high. I interpret high unemployment-employment ratios as evidence of labor market frictions, and develop a simple heterogeneous-firm search and matching model with choice between job search and self-employment to analyze their effect. Quantitative analysis of the model, separately calibrated to eight countries, shows that variation in labor market frictions can explain almost the entire variation in not only unemployment, but also wage employment and self-employment across the calibration countries. The model generates joint variation in unemployment and self-employment accounting for at least a third of their relationship in the data. Labor market frictions reduce output not only by affecting employment, but also by pushing searchers into low-productivity own-account work.

The role of self-employment in Ireland’s older workforce

Abstract A feature of employment at older ages that has been observed in many countries, including Ireland, is the higher share of self-employment. This pattern of higher self-employment rates may reflect lower rates of retirement among the self-employed compared to employees, as well as transitions into self-employment at older ages. While the US literature finds evidence for both explanations, the non-US literature is more ambiguous. In this paper, we use data from four waves of the Irish Longitudinal Study on Ageing (TILDA), spanning the period 2010–2016, to test whether higher rates of self-employment at older age results from both a lower probability of retirement on the part of the self-employed, as well as transitions into self-employment. We also examine the characteristics of the older self-employed and focus on the role of differences in supplementary pension cover between the employed and self-employed in determining retirement decisions. We find that the higher proportion of self-employed people at older ages in Ireland results from lower retirement rates among the self-employed and not from transitions from employment to self-employment. This is in contrast to the US where transitions into self-employment are more prevalent. We find that the self-employed are older, more likely to be male, and significantly less likely to have any form of supplementary pension cover than the employed. These lower retirement rates and lower degrees of supplementary pension cover suggest that standard approaches to pension provision may be less effective in proving attractive to the self-employed in Ireland.

Push and pull factors and Hispanic self-employment in the USA

This study examines the main push and pull factors driving Hispanic self-employment in the USA by modeling the self-employment decision as a function of sectoral earnings differences, country of origin, and other factors. Findings indicate that a main reason Hispanics engage in self-employment is they can earn more working for themselves than in wage/salary work. Immigrants appear to be pushed into self-employment as a result of limited opportunities in the wage work sector. Although low relative earnings in wage/salary work could push workers with limited English proficiency into self-employment, our findings indicate barriers to this. Results suggest that workers pulled into self-employment are those with more work experience and a college degree. Workers who originate from Southern South America and Colombia have relatively high self-employment rates, while Mexico-origin workers have relatively low self-employment rates. We also uncover differences across Hispanic origin groups in terms of the influence of gender, education, and personal wealth on self-employment participation.

A DYNAMIC MODEL OF SELF-EMPLOYMENT AND SOCIOECONOMIC MOBILITY AMONG RETURN MIGRANTS: THE CASE OF URBAN MEXICO.

Return migrants engage in high rates of self-employment, which scholars commonly attribute to the accumulation of financial and human capital while working abroad. Central to this scholarship is the assumption that self-employment is positive and leads to upward economic mobility among return migrants. This scholarship is limited, however, because it relies on large surveys and cross-sectional census data that treat self-employment as a single uni-dimensional status measured at one point in time. To improve conceptualization and measurement of self- employment, we engage three bodies of research that have thus far had little cross-fertilization: the literature on work and self-employment in Latin America, the scholarship on return migration and self-employment, and developments in economic theories of international migration. Drawing on results from the first longitudinal analysis of the labor market trajectories of Mexican return migrants in a large urban area in central Mexico, we identify three types of self-employment - survivalist, temporary, and prosperous. To explain these divergent self-employment pathways, we draw on biographical narratives and identify two sets of mechanisms - human capital formation and life-course stage. Overall, our investigation of self-employment types suggests a complex relationship between international migration experiences and the labor market mobility of return migrants which cannot be understood without taking into consideration migrants' social and economic circumstances before, during, and after migration. Consequently, our study yields insights into economic theories of international migration and provides direction for future research on return migration and labor market reintegration.

Entrepreneurial career paths: occupational context and the propensity to become self-employed

We investigate the relationship between characteristics of an occupation-specific environment and the decision of employees to start an own business. A relatively high occupation-specific unemployment risk and high earnings risk are conducive to opt for self-employment. Also, occupations that are characterized by high self-employment rates foster entrepreneurial choice among their employees. The results suggest that career choices of future entrepreneurs are driven by different motivations than those of non-entrepreneurs. In particular, the expectation of a pronounced financial gain is critical for future entrepreneurs when they make their initial occupational choices in paid employment and it is also relevant for a self-employment choice. We find that when future entrepreneurs enter the labor market, they are more likely to choose occupations that require a relatively high variety of skills.

Self-employment differentials among foreign-born STEM and non-STEM workers

This paper uses the American Community Survey to examine the previously overlooked fact that foreign STEM (science, technology, engineering, and mathematics) graduates have much lower self-employment rates than their non-STEM counterparts, with an unconditional difference of 3.3 percentage points. We find empirical support for differing earnings opportunities as a partial explanation for this self-employment gap. High wages in STEM paid-employment combined with reduced earnings in self-employment make self-employment less desirable for STEM graduates. High self-employment rates among other foreign-born workers partially reflect weak paid-employment opportunities. Public policy should encourage efficient use of worker skills rather than low-value business venture creation.

Self-Employment Differentials Among Foreign-Born Stem and Non-Stem Workers

This paper uses the American Community Survey to examine the previously overlooked fact that foreign STEM (science, technology, engineering, and mathematics) graduates have much lower self-employment rates than their non-STEM counterparts, with an unconditional difference of 3.3 percentage points. We find empirical support for differing earnings opportunities as a partial explanation for this self-employment gap. High wages in STEM paid-employment combined with reduced earnings in self-employment make self-employment less desirable for STEM graduates. High self-employment rates among other foreign-born workers partially reflect weak paid-employment opportunities. Public policy should encourage efficient use of worker skills rather than low-value business venture creation.

Self-employment amongst migrant groups: new evidence from England and Wales

Self-employment constitutes a vital part of the economy since entrepreneurs can provide employment not only for themselves but also for others. The link between self-employment and immigration is, however, complex, especially given the changing nature of self-employment. We investigate the evolving relationship between self-employment and immigration using recently released microdata from the 2011 Census for England and Wales. Our findings indicate large variations, with high self-employment rates observed for some groups with a long established history of migration to the UK (especially men born in Pakistan) and also for some groups who have arrived more recently (such as from the EU’s new member states). We further explore the differences, analyse variations by gender and identify key determining factors. In addition to certain socio-economic characteristics, it is found that migration-related influences, such as English language proficiency and period of arrival in the UK, play an important role for some groups.

Self-employment and trade shock mitigation

This paper investigates the moderating effects of entrepreneurial activity on the impact of trade penetration. Entrepreneurs may help to mitigate adverse trade shocks through several mechanisms, i.e., more flexible output structure, diversified economic portfolio, and higher knowledge spillovers from trade-induced R&D activities. Our empirical work embeds the analysis of entrepreneurship, measured using self-employment rates, into a framework of international trade and local labor markets. The empirical results show that the marginal impacts of Chinese import penetration on job losses are dampened in localities with higher self-employment rates, which suggests self-employment or entrepreneurial activities can mitigate the adverse impacts of trade penetration from low-income countries. Our study provides a novel perspective on entrepreneurs’ benefits on economic well-being: Besides their direct contribution to economic growth documented in earlier research, they can also enhance the resilience of a local economy in the face of external shocks.

Comment on “Public Pension Programs in Southeast Asia: An Assessment”

Asher and Bali (2015) is a wide-ranging paper, reviewing current pension issues in Southeast Asia, reporting demographic trends, and making recommendations for reform. The demographic forecasts reviewed in Chomik and Piggott (2015), Asher and Bali (2015), and some alternative projections reported in Table 1 underscore the challenges that some Southeast Asian countries face. Three countries stand out. First, Thailand appears to be remarkably “old,” resembling Singapore on some of the indices that Asher and Bali (2015) report. Second, the Philippines stands out as the only Southeast Asian country that does not become an aged society over the relevant time horizon. Third, Vietnam is expected to age quite rapidly, indeed becoming an aged society while most of the population is still rural. The joke about many Asian countries is that they will get “old” before they get “rich”; Vietnam is on a trajectory to get “old” before it gets “urban.” The large share of the population remaining rural matters: rural areas are characterized by lower population densities and higher rates of self-employment and informal employment which make these populations harder and more costly to serve in terms of the pension issues discussed in the paper. In this respect, Thailand stands out as having achieved universal health-care coverage while still having a relatively large low-income rural population. The contrast with socialist Vietnam, which appears to have trouble extending benefits to the rural populace, and the Philippines, whose pension program is characterized by extraordinary inefficiency, is striking. Ultimately public pensions are political arrangements. Looking at conditions today, the divergence between Thailand and Vietnam is remarkable, and presumably not simply a function of Thailand’s higher income level. A deeper exploration of the political economy of these outcomes could be fascinating. Looking forward, the question arises as to whether the ageing of these Asian societies will generate political economies to promote perverse intergenerational transfers favoring the old over the young as has happened in many of the advanced industrial countries.

Self-employment and job generation in metropolitan areas, 1969–2009

Many regional development policy initiatives assume that entrepreneurial activities promote economic growth. Empirical research has presented rationale for this argument showing that small firms create proportionally more new jobs than large firms. However, little research has been performed on the issue of net job generation at the urban level, particularly when self-employment is considered as an indicator of entrepreneurial activities. This paper investigates to what extent US metropolitan areas in the 1969–2009 period characterized by relatively high rates of self-employment also have shown relatively high rates of subsequent total employment growth. The analysis corrects for the influence of sectoral composition, wage level, educational attainment, presence of research universities and size of the metropolitan area to measure the extent to which the number and quality of self-employed in a region contribute to total employment growth. It finds the relationship between self-employment rates and subsequent total employment growth to be positive on average during the 40-year period but to weaken over time.

Self-Employment and Retirement in Canada: The Labour Force Dynamics of Older Workers

Using panel data from the Surveys of Labour and Income Dynamics covering the period 1993 to 2008 in Canada this study examines labour force transitions among older workers. High rates of self-employment among older workers primarily result from greater labour market continuation among the self-employed compared to paid employees. Older self-employed men across all characteristics examined are more likely to continue working at each age, while self-employed women do not respond to age-related factors (such as the pension system) to the same extent as paid employees. Labour market continuation is found to be higher among late-life entrants to self-employment than among paid employees after accounting for individual characteristics and job tenure.

Reversing the Brain Drain? Skilled Return Migration and the Global Movement of Expert Knowledge - Dissertation Executive Summary

My dissertation explores how skilled return migrants adapt the expertise they gained working abroad to workplaces in their home countries with data from an original survey of 4,183 skilled returnees from 81 countries, who had worked abroad in the U.S. First, I find that whether returnees are successful at transferring knowledge depends less on their individual ability and more on features of the professional environments in their home countries. Also, returnees who are effective brokers of knowledge bring back ideas about management practices more than they do technical knowledge. Third, returnees are more likely to become entrepreneurs if they have strong local ties to their home countries, the effect of which is stronger in countries with already high rates of self-employment. Finally, the very returnees who are most successful as knowledge brokers are also most likely to venture abroad again. These findings challenge the conventional notion of return migrants as agents of economic transformation, suggesting that many institutional challenges stand in the way of their ability to broker resources across borders.

Immigrants in the Washington DC Metropolitan Area Labor Market

This working paper highlights two major findings regarding the DC metro area’s immigrant population. The first finding is that the region’s foreign-born population is substantially different from its native born counterpart in many aspects. Overall, the foreign-born population in the region is more likely to have no high school diploma. They have higher labor participation rates, higher self-employment rates, lower median earnings and median household income, and are employed in different industry sectors than the native-born population.The second major finding is that the DC metro area’s immigrant population is a very heterogeneous group and it is misleading to draw conclusions about this population without differentiating by region of origin or citizenship status, for example. Substantial differences exist among the foreign-born population in terms of educational level, earnings, income, and industries engagement, depending on the immigrants’ country/region of origin and citizenship status.

Immigrant Entrepreneurship and the Opportunity Structure of the International Education Industry in Vancouver and Toronto

This study is situated within a broad research field of immigrant entrepreneurship and pays particular attention to the international education businesses owned and operated by Korean immigrants. Seeking causal factors of disproportionately high rates of self-employment among immigrant groups, researchers in this field have developed two distinct streams of theoretical explanation. While social capital, class and ethnic resources are often identified as major factors of successful immigrant entrepreneurship, the political economic structure (i.e., a wide range of opportunity structures including business regulations and market conditions) is also seen as an important pre-condition for immigrant business ventures. Drawing upon the analytical framework of the mixed embeddedness model by Kloostermen and Rath (2001), this study examines how different institutional environments and the consumer demand base of the international education industry result in different opportunity structures for Korean immigrant entrepreneurs in Vancouver and Toronto, Canada.