Immigrant self‐employment adjustment

Purpose - The purpose of this paper is to examine two aspects of the self‐employment adjustment of immigrant groups in the UK. First, how the probability of self‐employment for males changes with time since migration relative to the native population and second, how the probability of self‐employment for males differs between immigrants and the UK‐born within ethnic groups. Design/methodology/approach - Limited dependent variable regression models are estimated using data from the UK Labour Force Survey collected between 2001 and 2005. The results are presented graphically to make clear the differences between ethnic groups. Findings - The predicted self‐employment probability of “Asian” immigrants increases faster than that of natives over the lifecycle while that of “Black” groups declines. Furthermore, the observed lower propensity of UK‐born members of certain ethnic groups to be in self‐employment is largely explained by differences in human capital. Practical implications - High rates of self‐employment amongst some ethnic groups in the UK are unlikely to be a transitory phenomenon. Originality/value - While previous work on the UK has examined patterns of self‐employment between groups and over time, the paper looks for the first time at how adjustment within groups takes place over the life cycle and across nativity status.