What Makes an Entrepreneur and Does it Pay? Native Men, Turks, and Other Migrants in Germany

36 Pages Posted: 15 Dec 2003

See all articles by Amelie F. Constant

Amelie F. Constant

Princeton University; UNU-MERIT; CESifo

Yochanan Shachmurove

City University of New York, CUNY City College of New York - Department of Economics; The University of Pennsylvania - Department of Economics

Klaus F. Zimmermann

Harvard University; German Institute for Economic Research (DIW Berlin); University of Bonn; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2003

Abstract

This paper focuses on the entrepreneurial endeavors of immigrants and natives in Germany. We pay closer attention to Turks, since they are the largest immigrant group with a strong entrepreneurial tradition, and the self-employed Turks in Germany represent about 70% of all Turkish entrepreneurs in the European Union. We identify the characteristics of the self-employed individuals and understand their underlying drive into self-employment. At the same time we investigate how immigrant entrepreneurs fare in the labor market compared to natives. Employing data from the German Socioeconomic Panel 2000 release we find that the probability of self-employment increases significantly with age for all groups albeit at a decreasing rate. Among immigrants, Turks are twice as likely to choose self-employment as any other immigrant group. The age-earnings profiles of self-employed German and immigrant men are concave and surprisingly similarly shaped. While for self-employed German men hours of work and Treiman prestige scale scores increase their earnings, for self-employed immigrant men it is the longevity of the business that makes a difference. Everything else equal, the earnings of self-employed Turks are no different than the earnings of the self-employed Greeks, Italians, Spaniards, ex-Yugoslavs, Polish or other East Europeans, including those immigrants who have become German citizens.

Keywords: entrepreneurship, self-employment, occupational choice, immigrants, wage differentials

JEL Classification: J23, M13, J24, J61, J31

Suggested Citation

Constant, Amelie F. and Shachmurove, Yochanan and Zimmermann, Klaus F., What Makes an Entrepreneur and Does it Pay? Native Men, Turks, and Other Migrants in Germany (November 2003). IZA Discussion Paper No. 940. Available at SSRN: https://ssrn.com/abstract=475023

Amelie F. Constant

Princeton University ( email )

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Princeton, NJ 08544
United States

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UNU-MERIT ( email )

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CESifo ( email )

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Yochanan Shachmurove

City University of New York, CUNY City College of New York - Department of Economics ( email )

160 Convent Avenue
New York, NY 10031
United States
212-650-6202 (Phone)

The University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
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Philadelphia, PA 19104-6297
United States
215-898-1090 (Phone)
215-573-2057 (Fax)

Klaus F. Zimmermann (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

German Institute for Economic Research (DIW Berlin)

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Berlin, 10117
Germany

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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