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

Jan Brzozowski and Anke Lasek
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Anke Lasek: Cracow University of Economics, Rakowicka 27, 31-510 Kraków, Poland

Journal of Entrepreneurship, Management and Innovation, 2019, vol. 15, issue 2, 11-28

Abstract: 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.

Keywords: immigrant self-employment; economic integration; economic activity (search for similar items in EconPapers)
JEL-codes: F22 J24 L26 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.7341/20191521

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