The employees of native and immigrant self-employed

Journal of International Migration and Integration, 2011

Self-employment is very common among some immigrant groups in Sweden and many of them hire co-nationals in their firms. One reason might be that they want to give newly arrived co-nationals the possibility to earn an income. But what are the consequences for the employees of being employed by a co-national? This paper analyzes the impact on labour income and future employment prospects of being employed by self-employed co-nationals shortly after arrival to Sweden. We find that immigrants in this group have substantially lower incomes than newly arrived immigrants with other forms of employment. We also find that they are less likely to work as employees in the private sector (other than being employed by a self-employed) in the future and are much more likely to become self-employed.

2012

The interest in the role of small businesses in the labour market has been stimulated by Birch's claim that small firms create a higher share of new jobs than big ones (Birch, 1979). At the same time, many countries have witnessed the emergence of a blooming small-and medium-sized enterprise sector that consistently and increasingly influenced labour market outcomes. The evolution of the small business sector has led to promising changes in modern economies, playing an important role in technological change and in the growth and evolution of industries (Acs and Preston, 1997). A field in which economists have been notably absent, despite the relevance of the phenomenon at the national and international level, is the one of immigrant (or ethnic) entrepreneurship. Research on this issue has been dominated by sociologistsand to lesser extent, by economic geographers and cultural anthropologistsin a quest to explain why immigrants in advanced economies are more likely to become self-employed than natives, and more generally, why some ethnic groups show higher self-employment rates. Early-stage research pointed out that supply side factors like cultural characteristics (Bonacich, 1973), and resources, are significant factors. Resources can be either individual (e.g., human capital) and collective (group solidarity, social networkssee Portes, 1995-Given the absence of a comprehensive economic theory/literature and the policy relevance of ethnic entrepreneurship, further research is needed on this matter. Especially at local level, where the theoretical gaps mix with local specificities, the ambiguous results found for the above mentioned factors call for more empirical engagement. Using data at a very high level of geographical disaggregation, this thesis aims to show that group characteristics and market conditions matter in determining local entrepreneurship levels of immigrants. Unlike in previous studies, the set is not limited to according to most of this literature, a major attraction towards self-employment (Rees and

2004

Immigrants have a weak position in the labour market in most European countries. Many have difficulties in establishing themselves in the labour market, the employment rate is low and the hourly wages are generally lower than what could be expected from characteristics (age, gender, education). Many have to rely on the social transfer payments including social assistance. One way to

Sociology-the Journal of The British Sociological Association, 2004

Journal of Social Sciences, 2009

Problem statement: Denmark experienced one of the most successful periods of its economy in 2004-2008, with a tremendous reduction of 77% in unemployment. Due to the structural challenges with regard to the labor market the utilization of immigrants' qualifications has come up to the surface of political and societal debate in Denmark. The focus of this study was challenges to that utilization. Focusing on opportunity structure and the formal and informal components of the concept and self-employment among migrants as one of the major strategies towards upward socioeconomic mobility, this study attempted to establish "norm divergence" (between natives and migrants) as the analytical framework. Establishing "the norm divergence" empirically, we contributed to the development of a theoretical framework for understanding the socio-economic strategic choices of migrants in a European universal welfare state with an open economy. Approach: In order to establish the norm and the state of art we used the recent quantitative data 2001 and 2004 mapping the distribution of all self-employed migrants with national background in third countries with regard to (a) Business line: What they were doing and (b) Educational level: What was the level of their formal education. In order to make comparisons possible we had extracted data on 10% of self-employed with native Danish background. Searching for explanations, we included a wide range of qualitative data as semi-structured in-person interviews following an interview guideline. A total of 43 interviewees had been conducted were grouped into two categories: (1) Self-employed immigrants in Denmark and self-employed immigrants who had emigrated from Denmark and were now self-employed in other countries. (2) Governmental/semi governmental or private agencies dealing with the issue of self-employment among immigrants from third countries. Results: A considerable share of self-employed immigrants who had obtained vocational educations in Denmark-that was in comparison with native equivalents-and an even larger share of immigrants with educational records obtained abroad were placed in business lines identified as "the typical immigrant businesses". We find that the patterns of norm divergence can be explained by two sets of factors: One was the formal as well as the informal, e.g., substantially experienced by self employed immigrants, opportunity structure and the second was the type of qualifications that were required and developed in the informal economy, that produced and utilized specific comparative advantages. Conclusion: The traditionally used concepts like "over-education" or "mismatch" should be replaced by the concept of "Norm divergence" as far as the issue was discussed and analyzed within the framework of integration policy. That was the case in the Danish context as well as in many other European countries, where integration into the norms of the society was a premises as well as a requirement.

2012

The interest in the role of small businesses in the labour market has been stimulated by Birch's claim that small firms create a higher share of new jobs than big ones (Birch, 1979). At the same time, many countries have witnessed the emergence of a blooming small-and medium-sized enterprise sector that consistently and increasingly influenced labour market outcomes. The evolution of the small business sector has led to promising changes in modern economies, playing an important role in technological change and in the growth and evolution of industries (Acs and Preston, 1997). A field in which economists have been notably absent, despite the relevance of the phenomenon at the national and international level, is the one of immigrant (or ethnic) entrepreneurship. Research on this issue has been dominated by sociologistsand to lesser extent, by economic geographers and cultural anthropologistsin a quest to explain why immigrants in advanced economies are more likely to become self-employed than natives, and more generally, why some ethnic groups show higher self-employment rates. Early-stage research pointed out that supply side factors like cultural characteristics (Bonacich, 1973), and resources, are significant factors. Resources can be either individual (e.g., human capital) and collective (group solidarity, social networkssee Portes, 1995-Given the absence of a comprehensive economic theory/literature and the policy relevance of ethnic entrepreneurship, further research is needed on this matter. Especially at local level, where the theoretical gaps mix with local specificities, the ambiguous results found for the above mentioned factors call for more empirical engagement. Using data at a very high level of geographical disaggregation, this thesis aims to show that group characteristics and market conditions matter in determining local entrepreneurship levels of immigrants. Unlike in previous studies, the set is not limited to according to most of this literature, a major attraction towards self-employment (Rees and

2004

When studying income differences and income distribution, the self-employed are often excluded from the population studied. There are several good reasons for this, for example that incomes from self-employment are not reported to the same extent as incomes from being an employee. On the other hand it is a problem to exclude the self-employed when studying income differences if the

This study examines the dynamics of immigrant entrepreneurship in Sweden, considering the nation's rich history of diverse immigration flows. It explores how various factors-immigration background, gender, age, geographical location, length of stay and reasons for immigration-impact immigrants' propensity to become entrepreneurs and their employment rate. Utilizing a blend of qualitative research and quantitative data analysis, the study highlights the critical role of self-employment in economic integration for immigrants, particularly in overcoming labor market barriers such as discrimination and unrecognized qualifications. It delves into the influence of ethnic enclaves and societal factors on entrepreneurial decisions. This research not only contributes to academic discourse on immigration and entrepreneurship in Sweden but also provides valuable insights for policymakers, business organizations and social actors aiming to foster economic integration among immigrants.

Small Business Economics, 2017

This paper examines the immigrant's decision to become self-employed. Personal characteristics and attitudes are crucial to this decision, but recent literature also highlights the importance of social networks as providers of information and financial support. To date, empirical research dealing with the network effect has considered self-employed migrants as a homogeneous group. In contrast, our paper examines the impact of the size and the composition of geographic concentration of co-nationals on the propensity to be self-employed among the foreign-born workers taking into account two possible choices: own-account workers and entrepreneurs. Using micro-level data of migrant workers in Spain over the period 2000-2009, the results show that networks affect positively the probability of becoming self-employed. However, they do not affect the likelihood of becoming an entrepreneur, which is determined by individual characteristics such as education and number of years of residence. Thus, our results suggest policies that enable immigrant assimilation can play a significant role in generating entrepreneurial activity.

Finnish Yearbook of Population Research, 1996

In recent decades, Sweden has suffered from a relatively low growth rate, while undergoing a transformation towards increased service sector employment and decreased industrial employment. Simultaneously with the economic changes, the constitution of immigration to Sweden has also changed significantly, shifting from European labor migrants to non-European refugees and tied movers. This Paper discusses the forces behind the decreasing labor market attachment among immigrants to Sweden in the period 1970-1990. Points of special interest here are employment rates and relative incomes of various immigrant nationalities. This is accomplished through the charting of labor force Participation rates and employment patterns of different immigrant groups over the period in question. The statistics in this paper are based on the five most recent Swedish censuses, from which we have data at the individual level regarding age, sex, country of origin, employment status, sector of employment, and...

2016

In the aftermath of the migration crisis which Europe faced during 2015 Sweden's migration policy has been adapted to a significantly more restrictive one. As a result of the significant influx of people into the country, the government is concerned about the integration of the immigrants into the labour market. This thesis analyses both empirically and theoretically whether natives and foreign born labourers are perfect substitutes or not on the labour market using descriptive data and an econometric linear model with data over wages across 109 different professions during the years 2004 to 2013. Native and foreign born labourers are found to be imperfect substitutes on the labour market.

There are concerns about the attachment of immigrants to the labour force, and the potential policy responses. This paper uses a bi-national survey on immigrant performance to investigate the sorting of individuals into full-time paid-employment and entrepreneurship and their economic success. Particular attention is paid to the role of legal status at entry in the host country (worker, refugee, and family reunification), ethnic networks, enclaves and other differences among ethnicities for their integration in the labour market. Since the focus is on the understanding of the self-employment decision, a two-stage structural probit model is employed that determines the willingness to work full-time (against part-time employment and not working), and the choice between full-time paid work and self-employment. The choices are determined by the reservation wage for full-time work, and the perceived earnings from working in paid-employment and as entrepreneur, among other factors. Accounting for sample selectivity, the paper provides regressions explaining reservation wages, and actual earnings for paid-employment and self-employment, which provide the basis for such an analysis. The structural probit models suggest that the expected earnings differentials from working and reservation wages and for self-employment and paid-employment earnings matter much, although only among a number of other determinants. For Germany, legal status at entry is important; former refugees and those migrants who arrive through family reunification are less likely to work fulltime; refugees are also less self-employed. Those who came through the employment channel are more likely to be in full-time paid work. In Denmark, however, the status at entry variables do not play any significant role. This suggests that the Danish immigrant selection system is ineffective.

2009

This paper examines the impact of home country economic status on immigrant selfemployment probability in the U.S. We estimate a probability model and find that, consistent across race, immigrants from developed countries are more likely to be self-employed in the U.S than are immigrants from developing countries. This result is unexpected given previous research which suggests that immigrants from countries with high levels of self-employment tend to be more involved in self-employment in the U.S. Developing countries on average have higher self-employment rates than do developed countries but our research shows that immigrants from developing countries have similar or lower self-employment probabilities relative to native born White Americans, whereas immigrant from developed countries have significantly higher self-employment probabilities relative to native born White Americans. We provide two potential explanations for this result. First, immigrants from developed countries may indeed have more and better access to start-up capital from their country of origin. Second, institutional arrangements in the developed world may be similar across countries allowing immigrants from developed countries to have an informational advantage over immigrants from developing countries. JEL Classification: J21, E24, J61, J40

Review of Economics of The Household, 2011

This paper studies the intergenerational transmissions of self-employment abilities among immigrants in Sweden. The results show that second-generation immigrants are over-represented in self-employment compared to natives. Male immigrants from countries neighbouring to Sweden and natives alike seem to use both mothers and fathers as role models in their self-employment decision, but the father is the stronger role model among male