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http://ssrn.com/abstract=217548
 
 

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The Effect of Immigration on Native Self-Employment


Robert W. Fairlie


University of California, Santa Cruz - Department of Economics

Bruce D. Meyer


University of Chicago - Irving B. Harris Graduate School of Public Policy Studies; National Bureau of Economic Research (NBER)

February 2000

NBER Working Paper No. w7561

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.

Number of Pages in PDF File: 42

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Date posted: May 5, 2000  

Suggested Citation

Fairlie, Robert W. and Meyer, Bruce D., The Effect of Immigration on Native Self-Employment (February 2000). NBER Working Paper No. w7561. Available at SSRN: http://ssrn.com/abstract=217548

Contact Information

Robert W. Fairlie (Contact Author)
University of California, Santa Cruz - Department of Economics ( email )
Department of Economics
Engineering 2 Bldg.
Santa Cruz, CA 95064
United States
831-459-3332 (Phone)
HOME PAGE: http://econ.ucsc.edu/~fairlie/
Bruce D. Meyer
University of Chicago - Irving B. Harris Graduate School of Public Policy Studies ( email )
1155 East 60th Street
Chicago, IL 60637
United States
(773) 702-2712 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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