The Effect of Immigration on Native Self-Employment

Robert Fairlie and Bruce Meyer

No 7561, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A rapidly growing literature examines the impact of immigrants on the labor market outcomes of native-born Americans. However, the impact of immigration on natives in self-employment has not been examined, despite the over-representation of immigrants in that sector. We first present a new general equilibrium model of self-employment and wage/salary work. For a range of plausible parameter values, the model predicts small negative effects of immigration on native self-employment rates and earnings. Using 1980 and 1990 Census microdata, we then examine the relationship between changes in immigration and native self-employment rates and earnings across 132 of the largest metropolitan areas in the United States. We find evidence supporting the hypothesis that self-employed immigrants displace self-employed natives. The effects are much larger than those predicted by simulations of the theoretical model. Immigrants, however, do not have a negative effect on native self-employment earnings. Our findings are similar if we weight immigration rates by the propensity of immigrant groups to be self-employed or if we try alternative estimation techniques and specifications.

JEL-codes: J23 J61 (search for similar items in EconPapers)
Date: 2000-02
New Economics Papers: this item is included in nep-lab
Note: LS
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Citations: View citations in EconPapers (2)

Published as Fairlie, Robert W. and Rebecca A. London, "The Effect of Incremental Benefit Levels on Births to AFDC Recipients," Journal of Policy Analysis and Management, Vol. 16, no. 4 (Autumn 1997): 575-597
Published as Journal of Labor Economics, Vol. 21, no. 3 (July 2003): 619-650

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Related works:
Working Paper: The Effect of Immigration on Native Self-Employment (2014)
Journal Article: The Effect of Immigration on Native Self-Employment (2003)
Working Paper: The Effect of Immigration on Native Self-Employment
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