Self-employed Immigrants Research Articles

Home Country Work Experience and Immigrant Self-Employment in the United States

Immigrant entrepreneurship in the United States has grown steadily in the last four decades. In this paper, I study the occupational choices of legal permanent residents and their associated earnings in paid and self-employment. Using a unique data set with pre- and postmigration individual-level information, I analyze the role of home country work experience of immigrants in their probability of becoming entrepreneurs and their earnings after migration. To control for endogenous sector selection in the estimation of earnings distributions, I follow a novel identification strategy based on extremal quantile regressions that does not require exclusion restrictions or a large support variable. I find that foreign work experience in paid and self-employment is an important predictor of entrepreneurship after migration. In addition, it impacts earnings in the United States but differently across sectors, controlling for human capital, assimilation, time, region of origin, U.S. destination, previous migratory status, and demographic characteristics. Overall, my results highlight the role played by immigrants’ labor market history from their home countries to better understand their outcomes in the United States.

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.

Self-employment of immigrants and natives: an empirical analysis using the Integrated values Survey

Self-employment of immigrants and natives: an empirical analysis using the Integrated values Survey

African immigrants self-employment journey: navigating contextual challenges in South Africa

PurposeThe study explores experiences of African immigrants in their self-employment journey. South Africa has been receiving many African immigrants seeking for socio-economic survival. This presents a gap to understand the self-employment journey of such immigrants post-settlement.Design/methodology/approachA qualitative inquiry is used with semi-structured interviews using a sample of African immigrants based in South Africa. Narrative enquiry was utilised in trying to understand the African immigrant self-employment journey.FindingsThe findings show strategies used by African immigrant entrepreneurs in their self-employment journey. These include immigrant relying on established relationships to respond to contextual challenges. Further, immigrant entrepreneurs turned to borrowing from family, including personal savings and using fronts as a capital generation strategy.Originality/valueBased on the findings strategies are suggested as a useful precursor in advancing understanding of the African immigrant self-employment journey. This becomes useful especially considering ideals for assisting post-settlement of migrants.

Green Entrepreneurship Between Self-Employed Immigrants and Natives

Facing global environmental crises, can one observe differences between self-employed immigrants and their native counterparts in terms of green entrepreneurship? Also, should this difference influence the life satisfaction of the entrepreneurs? We address these issues through the lens of social identity while considering the interactions between social identity and cultural cognitive institutions. Analyzing empirical data of self-employed entrepreneurs in 33 countries, we find interesting differences. For instance, there is a significant difference between the immigrants and their native counterparts in terms of their social identity with the country that accepts the immigrants, and this difference can be significantly moderated by some cultural cognitive variables, such as Institutional and In-Group Collectivism. Moreover, this difference leads to different performance/behaviors in terms of green entrepreneurship between the two groups of the entrepreneurs, which can also be moderated by different cultural cognitive variables. Finally, in countries high in In-Group Collectivism, a positive relationship between the green entrepreneurship and life satisfaction among the entrepreneurs is more likely to be observed. We conclude by discussing the implications of our findings.

Does Self-Employment Contribute to Immigrants’ Economic Integration? Examining Patterns of Self-Employment Exit in Belgium

This article assesses whether self-employment can help immigrants overcome some of the ongoing challenges they face in highly segmented labor markets, by investigating the reasons behind native-immigrant differences in exit from self-employment. While a considerable literature examines the factors influencing immigrants’ decision to become self-employed, surprisingly few studies address the factors that shape exit from self-employment. This article studies native-immigrant differences in self-employment exit, drawing on longitudinal data (2008–2017) for Belgium, and adds to previous research on immigrant self-employment by considering second-generation and female immigrant business owners. Results show that immigrants were much more likely than natives to become unemployed or leave the labor force after a period in self-employment, supporting the idea that immigrants are pushed out of self-employment. Second-generation immigrants generally had better self-employment outcomes than first-generation immigrants, whereas female immigrants sometimes experienced a “double disadvantage.” Weaker attachment to the labor market preceding self-employment entry helps explain why immigrants had worse self-employment outcomes than natives in Belgium. Hence, self-employment may not provide an independent path to economic integration that allows immigrants to overcome the hurdles they face in the labor market. Instead, how people fared in the labor market before becoming self-employed strongly influenced their success as self-employed workers. This article highlights the policy complexity of immigrants’ labor market integration in Western European labor markets. As it shows, it is not enough to promote self-employment as an easy way out of immigrants’ labor market exclusion. Instead, more is needed to counteract immigrants’ problematic labor market outcomes.

The future-time reference of home-country language and immigrant self-employment: an imprinting perspective

The future-time reference of home-country language and immigrant self-employment: an imprinting perspective

Intergenerational and ethnonational disparities in Hispanic immigrant self-employment

Hispanics are important contributors to the self-employment sector. Their entrepreneurial activity varies by immigration status and ethnonational subgroup. We comparatively examine the self-employment of Hispanics who immigrated as adults, those who immigrated as children, and non-immigrants of four groups in the United States: Mexicans, Puerto Ricans, Cubans, and Southern South Americans. We investigate intergenerational assimilation through self-employment into the three trajectories posited by segmented assimilation theory. We estimate regression models using a sample from the American Community Survey of Hispanics (n = 585,279) and US-born non-Hispanic Whites (n = 2,848,456). In a subsequent exploratory analysis, we estimate models for Hispanic origin and immigrant status groups to compare key predictors. We find that self-employment probabilities indicate distinct assimilation patterns for our origin groups. The exploratory analysis reveals different effects of important characteristics across groups. This work highlights the need for policies tailored toward the heterogeneity in Hispanics’ assimilation processes.

Give me your rested, your wealthy, your educated few? A critical discussion of the current literature on immigrant self-employment

PurposeThe finding that immigrants are more likely to self-employ than natives has been consistently shown by different researchers. At the same time, many call for the prioritization of high-skilled immigration as they believe low-skilled entrepreneurs are not particularly innovative or high-growth-oriented. The purpose of this study is to critically review and synthesize the current literature on immigrant self-employment, paying particular attention to low-skilled immigrant entrepreneurship and the popular policy recommendation that high-skilled immigrants should be prioritized.Design/methodology/approachThe authors survey the existing literature on immigrant self-employment and discuss recurring data issues, how those issues have or have not been addressed, as well as how these data issues impact the validity of policy recommendations that favor high-skilled immigrants and disfavor low-skilled immigrants. In particular, the authors examine how length of stay in the host country and host country institutions impact immigrant self-employment, especially low-skilled immigrant self-employment. The authors also point out unintended consequences of low-skilled immigration.FindingsThe authors find data issues significantly impact the potential justifications behind calls to favor high-skilled immigrants. In particular, many researchers underestimate the positive impacts of low-skilled immigrant self-employment by not accounting for institutions and length of stay in the host country. The authors conclude with policy recommendations that prioritize high-skilled immigration should be re-examined in light of recurring omitted variable biases within previous studies and evidence of a number of positive unintended consequences associated with low-skilled migration.Originality/valueThe authors review current literature and discuss how important confounding variables, like the number of years an immigrant entrepreneur has lived in a host country and the institutions of a host country, make common policy recommendations suggesting prioritization of high-skilled immigration problematic. The authors also discuss potential solutions to these data issues, ways these issues have been solved already, and possible ways forward. Finally, after considering the literature, the authors offer our own set of policy recommendations.

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

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

Progress of migration scholarship over 60 years of International Migration

Progress of migration scholarship over 60 years of <i>International Migration</i>

Relationship between Employment Type and Self-Rated Health among Korean Immigrants in the US: Focusing on Gender and Number of Years in the US.

Although Korean immigrants report worse self-rated health and a higher self-employment rate than other Asian immigrant groups, the relationship between their employment type and self-rated health is understudied. This study examines the relationship between employment type and self-rated health among Korean immigrants in the US. Survey data of 421 first-generation working-age (18–64 years old) Korean immigrants in the New York–New Jersey area were analyzed. The self-administrated survey questionnaire included 39 items (e.g., sociodemographic characteristics, self-rated health, and health insurance status). A logistic regression analysis was conducted to examine the relationship between the dependent variable—self-rated health (e.g., bad/not bad vs. good/very good)—and independent variable—employment type (e.g., work at non-ethnic firms, work at co-ethnic firms, self-employed, and unemployed)—by focusing on differences regarding gender and number of years living in the US. Self-employed and unemployed Korean immigrants were less likely to report good health compared to those working in non-ethnic firms. After controlling for sociodemographic characteristics (age, gender, marital status, education, health insurance status, membership in any Koran association, religion, and English proficiency), the relationship between employment type and self-rated health remained significant among female and recent Korean immigrants. More worksite interventions by occupational health nurses that target self-employed Korean immigrants, especially women and recent immigrants, are necessary.

Self-employment as a stepping stone to better labor market matching: a comparison between immigrants and natives

AbstractThe paper investigates the relation between overeducation and self-employment, in a comparative analysis between immigrants and natives. Using the EU Labour Force Survey for the year 2012 and controlling for a list of demographic characteristics and general characteristics of 30 destination countries, it finds that the likelihood of being overeducated decreases for self-employed immigrants, with inconclusive results for self-employed natives. The results shed light on the extent to which immigrants adjust to labor market imperfections and barriers to employment and might help explain the higher incidence of self-employment that immigrants exhibit, when compared to natives. This is the first study to systematically study the nexus between overeducation and self-employment in a comparative framework. Moreover, the paper tests the robustness of the results by employing two different measures of overeducation, contributing to the literature of the measurement of overeducation.

Long-term neighbourhood effects on immigrant self-employment

The aim of this article is to analyse how the decision to become self-employed as an adult is influenced by the neighbourhood characteristics experienced during adolescence. The focus is on individuals of foreign background since this is a group that shows low employment rates compared with native Swedes at the same time as the geographic and social separation between individuals of different backgrounds is increasing. The results show that while the short-term effects of segregation on self-employment are negative, individuals who grow up in ethnically segregated neighbourhoods are more likely to become self-employed later in life. In addition, both growing up with and residing with entrepreneurial neighbours have a positive effect on self-employment. Hence, the ethnic and social capital collected during youth seems to persist through adulthood.

Self-Employment Dynamics of Immigrants and Natives: Individual-level Analysis for the Canadian Labour Market

This paper analyses the dynamic transitions of self-employment in four states of the Canadian labour market (paid-employment, self-employment, unemployment, and being out of the labour force) by answering three core questions: (1) What are the determinants of the transitions into and out of the four labour market states? (2) Are the probabilities of transitions between immigrants and natives significantly different, and if so, are they due to entry–exit rate gaps between immigrants and natives? (3) What are the proportions of spurious and structural state dependence in the labour market states of immigrants and natives? Our analysis was based on longitudinal data from Canada’s Survey of Labour and Income Dynamics (SLID) for males aged 25 to 55 for the period 1993 to 2004. Our results revealed that immigrants rather than natives are relatively more likely to be self-employed during the unemployment period. The findings also confirmed that males with positive investment income or wealth tended to be largely self-employed. From a policy perspective, the government provision of financial support towards self-employment positively benefits natives in seeking self-employment opportunities. Government policies to lessen labour market discrimination promotes the self-employment of immigrants.

Performance and job creation among self-employed immigrants and natives in Sweden

This paper uses individual-level panel data for all self-employed in the retail and service sectors to study how immigrant- and native-owned firms perform and contribute to job creation in Sweden. We use an individual fixed-effects model to explore how self-employment outcomes among immigrants and natives evolve with self-employment experience. The advantage of our approach is that it enables estimations of the returns to self-employment experience while controlling for unobservable time-constant individual factors. The results show that profits increase with self-employment experience and at a faster rate among immigrant men and women than for their native counterparts. Turnover and the likelihood of having employees both increase with experience and in a similar magnitude for immigrants and natives.

Self-employed immigrants and their employees: evidence from Swedish employer-employee data

We present a study of the employees of self-employed immigrants with unincorporated firms in Sweden using matched employer-employee data from 2014. Non-European immigrants are more likely than natives to have employees in their firms. Furthermore, immigrants, especially non-European immigrants, are more likely than natives to employ immigrants in their firms, and non-European immigrants are most likely to employ recently arrived non-European immigrants with low education in their firms. Males are more likely than females to have employees in their firms, but self-employed females are more likely than self-employed males to have female employees. This is the case for all immigrant groups as well as for natives. We conclude that self-employed immigrants play a role in the labour market integration process since they create employment opportunities for immigrant groups that have difficulty entering the labour market.

The impact of self-employment on the economic integration of immigrants: Evidence from Germany

Traditional approaches in migration studies suggest that self-employment and entrepreneurial activities enhance the perspectives of economic advancement of immigrants in host countries. Therefore, in many popular destinations in Western Europe and Northern America, policies encouraging the self-employment of immigrants have been proposed. But does the self-employment contribute to the economic integration of immigrants? Is it a universal, one-way avenue that guarantees the successful insertion of foreigners in a new socio-economic environment? Based on the German Socio-Economic Panel dataset, this study empirically investigates the effect of self-employment on the economic integration of immigrants in one of the most important host countries in Europe. Our results demonstrate that the current self-employment status in Germany is associated with higher income in absolute and relative (self-assessment) terms. The immigrants with previous self-employment experience in Germany are less integrated than the average. This result indirectly shows that the business economy of immigrants is associated with a high risk of failure and not all self-employed individuals succeed in advancing in economic terms in a host country. Consequently, we argue that host countries should be more cautious in promoting entrepreneurship as the “perfect” and “universal” strategy that improves economic integration.

Ethnicity and Tax Filing Behavior

We analyze differences in tax filing behavior between natives and immigrants using population-wide Swedish administrative data, focusing on two empirical examples. First, controlling for a rich set of variables, we compare deduction behavior of immigrants and natives with the same commuting patterns within Sweden’s largest commuting zone. We find that newly arrived immigrants file fewer deductions than natives, that immigrants with a longer duration of stay in the host country behave more like natives, and that immigrants with the longest stay file the most, even more than natives. Second, we analyze bunching behavior among the self-employed at the salient first kink point of the Swedish central government income tax schedule, located in the upper middle part of the income distribution. We find that self-employed immigrants exhibit significantly less bunching behavior than natives, even after a long time in the host country. We highlight residential segregation as a main driver of the observed behavioral differences.

Self-Employment Among North Korean Migrants

Abstract In the absence of concrete ethnic differences, the division of a single Korean nation into two opposing states has led to the creation of specific types of nationhood and state building. This pseudo-ethnicity, which marks North Korean immigrants as “other” to South Koreans, results in adaptation problems and cultural difficulties. As the sociological literature considers self-employment of minorities and immigrants to be an important avenue for upward economic mobility, this paper focuses on North Korean new settlers who have established their own businesses in South Korea. By case study analysis, it was revealed that new settlers and official organisations have highly differing perceptions on the issue of North Korean self-employment. Public authorities try to discourage North Koreans from becoming self-employed, which is why a comprehensive economic support programme is lacking. However, it was discerned that a new generation of new settlers is growing, showing high motivation and entrepreneurial spirit. The result of this study showed that a tailored support programme for self-employed North Koreans, such as an adapted form of social enterprises, is needed.