IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp1280.html
   My bibliography  Save this paper

Why Do Self-Employed Immigrants in Denmark and Sweden Have Such Low Incomes?

Author

Listed:
  • Andersson Joona, Pernilla

    (SOFI, Stockholm University)

  • Wadensjö, Eskil

    (Stockholm University)

Abstract

When studying income differences and income distribution, the self-employed are often excluded from the population studied. There are several good reasons for this, for example that incomes from self-employment are not reported to the same extent as incomes from being an employee. On the other hand it is a problem to exclude the self-employed when studying income differences if the group is large, if the share that is self-employed differs between groups and if there is a difference in the average income from self-employment compared to the average wage income. This is the case when we study incomes for immigrants in Western Europe. The immigrants are overrepresented among the selfemployed, self-employed immigrants are in other sectors than self-employed natives, and the incomes from self-employment differ from the incomes of the wage earners. In this paper we look at the incomes for the self-employed in Denmark and Sweden. To minimize the problems with unreported income we will mainly compare the annual incomes of the selfemployed immigrants and their native counterparts. The measurement error should only create a bias in the estimate of the income difference between the groups if there is a systematic difference in how they report their incomes. Using two cross-sections, one for each country, we find large income differences between natives and immigrants in both countries. Regression estimates show that most characteristics have the same influence in the two countries but also some interesting differences. Using quantile regressions we find that the difference in annual incomes differs depending on where in the income distribution we look. We find that the difference is smaller higher up in the distribution.

Suggested Citation

  • Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Why Do Self-Employed Immigrants in Denmark and Sweden Have Such Low Incomes?," IZA Discussion Papers 1280, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1280
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp1280.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Brownstone & Robert Valletta, 2001. "The Bootstrap and Multiple Imputations: Harnessing Increased Computing Power for Improved Statistical Tests," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 129-141, Fall.
    2. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    3. Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Other Forms of Employment: Temporary Employment Agencies and Self-Employment," IZA Discussion Papers 1166, Institute of Labor Economics (IZA).
    4. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    5. Bruce Bradbury, 1996. "Are the Low Income Self-employed Poor?," Discussion Papers 0073, University of New South Wales, Social Policy Research Centre.
    6. Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Self-Employed Immigrants in Denmark and Sweden: A Way to Economic Self-Reliance?," IZA Discussion Papers 1130, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tüzin Baycan-Levent & Peter Nijkamp, 2009. "Characteristics of migrant entrepreneurship in Europe," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(4), pages 375-397, July.
    2. Tüzin Baycan-Levent & Peter Nijkamp, 2010. "Migrant Entrepreneurship in a Diverse Europe: In Search of Sustainable Development," Chapters, in: Maddy Janssens & Myriam Bechtoldt & Arie de Ruijter & Dino Pinello & Giovanni Prarolo & Vanja M.K. S (ed.), The Sustainability of Cultural Diversity, chapter 16, Edward Elgar Publishing.
    3. Nina Lazarczyk-Bilal & Beata Glinka, 2020. "What Determines the Entrepreneurial Intentions of Highly-Skilled Women with Refugee Experience? An Empirical Analysis in the Context of Sweden," Administrative Sciences, MDPI, vol. 11(1), pages 1-18, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Uebelmesser Silke, 2006. "To Go or Not to Go: Emigration from Germany," German Economic Review, De Gruyter, vol. 7(2), pages 211-231, May.
    2. Lemos, Sara & Portes, Jonathan, 2008. "New Labour? The Impact of Migration from Central and Eastern European Countries on the UK Labour Market," IZA Discussion Papers 3756, Institute of Labor Economics (IZA).
    3. Zenou, Yves & Battu, Harminder & Mwale, MacDonald, 2003. "Do Oppositional Identities Reduce Employment for Ethnic Minorities?," CEPR Discussion Papers 3819, C.E.P.R. Discussion Papers.
    4. Dilan Tas & Merima Kastrat, 2019. "Does Immigration Affect Native’s Labor Market Outcomes in Germany?," LIS Working papers 770, LIS Cross-National Data Center in Luxembourg.
    5. Stephen Wheatley Price, 2001. "The unemployment experience of male immigrants in England," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 201-215.
    6. Smolny, Werner & Rieber, Alexander, 2016. "Labour market integration of immigrants - Evidence for the German guest workers," VfS Annual Conference 2016 (Augsburg): Demographic Change 145629, Verein für Socialpolitik / German Economic Association.
    7. Michael Fertig & Stefanie Schurer, 2007. "Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias," SOEPpapers on Multidisciplinary Panel Data Research 30, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Alberto Bisin & Eleonora Patacchini & Thierry Verdier & Yves Zenou, 2011. "Ethnic identity and labour market outcomes of immigrants in Europe [Assessing the oppositional culture explanation for racial/ethnic differences in school performance]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 26(65), pages 57-92.
    9. M. Moretto & Sergio Vergalli, 2008. "Migration dynamics," Journal of Economics, Springer, vol. 93(3), pages 223-265, April.
    10. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    11. Prummer, Anja & Siedlarek, Jan-Peter, 2014. "Institutions And The Preservation Of Cultural Traits," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 470, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    12. Ilana Redstone Akresh, 2008. "Occupational Trajectories of Legal US Immigrants: Downgrading and Recovery," Population and Development Review, The Population Council, Inc., vol. 34(3), pages 435-456, September.
    13. Thomas Bauer & Mathias Sinning, 2011. "The savings behavior of temporary and permanent migrants in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 421-449, April.
    14. Dustmann, Christian & Kirchkamp, Oliver, 2002. "The optimal migration duration and activity choice after re-migration," Journal of Development Economics, Elsevier, vol. 67(2), pages 351-372, April.
    15. Brenzel, Hanna & Reichelt, Malte, 2015. "Job mobility as a new explanation for the immigrant-native wage gap : a longitudinal analysis for the German labor market," IAB-Discussion Paper 201512, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Moreno-Galbis, Eva & Tritah, Ahmed, 2016. "The effects of immigration in frictional labor markets: Theory and empirical evidence from EU countries," European Economic Review, Elsevier, vol. 84(C), pages 76-98.
    17. Timothy J. Hatton, 2010. "The Cliometrics Of International Migration: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 24(5), pages 941-969, December.
    18. Harminder Battu & McDonald Mwale & Yves Zenou, 2007. "Oppositional identities and the labor market," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(3), pages 643-667, July.
    19. Susanne Below, 2007. "What are the chances of young Turks and Italians for equal education and employment in Germany? The role of objective and subjective indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 82(2), pages 209-231, June.
    20. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.

    More about this item

    Keywords

    income differences; self-employment; quantile regressions; immigrant workers;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.