Labor Market Assimilation and the Self- Employment Decision of Immigrant Entrepreneurs

Arbeitspapier

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Variables for the proportion of immigrants in the population and average earnings ratios are used as instruments to control for self-selection into self-employment and consequently identify the inverse Mills correction term in the earnings models. Self-employed immigrants do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives? wage/salary earnings at about age 30 and natives? self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrantnative earnings gap by, on average, roughly 14 percent.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 54

Classification and Topics

• Classification: Wirtschaft ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Geographic Labor Mobility; Immigrant Workers ; Labor Demand
• Subject: Immigration ; assimilation ; self-employment ; Einwanderung ; Migranten ; Arbeitsangebot ; Selbstständige ; Unternehmer ; Einkommensverteilung ; Soziale Integration ; Schätzung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lofstrom, Magnus
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/20890
• Last update: 10.03.2025, 11:43 AM CET