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

52 Pages Posted: 29 Feb 2000

See all articles by Magnus Lofstrom

Magnus Lofstrom

Public Policy Institute of California; Institute for the Study of Labor (IZA)

Date Written: November 1999

Abstract

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. Self-employed immigrants are found to 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 immigrant-native earnings gap by, on average, 14 percent.

JEL Classification: J15, J23, J61

Suggested Citation

Lofstrom, Magnus, Labor Market Assimilation and the Self-Employment Decision of Immigrant Entrepreneurs (November 1999). IZA Discussion Paper No. 54. Available at SSRN: https://ssrn.com/abstract=201850

Magnus Lofstrom (Contact Author)

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