The predicted earnings differential and immigrant self-employment in Sweden

Mats Hammarstedt ()

Applied Economics, 2006, vol. 38, issue 6, 619-630

Abstract: This paper investigates the influence of the predicted earnings differential between self-employment and wage-employment on self-employment propensities among immigrants in Sweden. Immigrants from non-European countries have essentially lower earnings from self-employment and wage-employment than immigrants from European countries. It is found that the difference between an immigrant's predicted earnings in self- and wage-employment has a strong influence on an immigrant's self-employment decision. A one unit increase in the log differential between self-employment and wage-employment earnings increase the self-employment rate among immigrants by about 5 percentage points, suggesting that discriminatory wages in the wage-employment sector may push immigrants towards self-employment.

Date: 2006
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DOI: 10.1080/00036840500397069

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