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Migration, risk attitudes, and entrepreneurship: evidence from a representative immigrant survey

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  • Catia Batista
  • Janis Umblijs

Abstract

Do more risk loving migrants opt for self-employment? We use a novel vignette-adjusted measure of risk preferences to investigate the link between risk aversion and entrepreneurship in migrant communities. Using an original representative household survey of the migrant population in the Greater Dublin Area, we find a significant negative relationship between risk aversion and entrepreneurship. Our results show that the use of vignettes improves the significance of the results, as they simultaneously correct for differential item functioning (where respondents interpret the self-evaluation scale in different ways) between entrepreneurs and non-entrepreneurs, and correct for variation in the use of self-evaluation scales between migrants from different countries of origin. This finding may help explaining the variability in results on the correlation between risk preferences and entrepreneurship reported in previous studies. JEL: F22; J01; J15; J61; L26 Copyright Batista and Umblijs.; licensee Springer. 2014

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  • Catia Batista & Janis Umblijs, 2014. "Migration, risk attitudes, and entrepreneurship: evidence from a representative immigrant survey," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    • Handle: RePEc:spr:izamig:v:3:y:2014:i:1:p:1-25:10.1186/s40176-014-0017-4
    DOI: 10.1186/s40176-014-0017-4
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    19. Arthur van Soest & Liam Delaney & Colm Harmon & Arie Kapteyn & James P. Smith, 2011. "Validating the use of anchoring vignettes for the correction of response scale differences in subjective questions," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 174(3), pages 575-595, July.
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    Cited by:

    1. Catia Batista & Ana Isabel Costa, 2016. "Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey," NOVAFRICA Working Paper Series wp1601, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    2. Zhan, Crystal & Deole, Sumit, 2022. "Economic Preferences and the Self-selection of Immigrants," GLO Discussion Paper Series 1156, Global Labor Organization (GLO).
    3. Catia Batista & Janis Umblijs, 2016. "Do migrants send remittances as a way of self-insurance?," Oxford Economic Papers, Oxford University Press, vol. 68(1), pages 108-130.
    4. Ajzenman, Nicolás & Aksoy, Cevat Giray & Guriev, Sergei, 2022. "Exposure to transit migration: Public attitudes and entrepreneurship," Journal of Development Economics, Elsevier, vol. 158(C).
    5. Iranzo Sancho, Susana, 2017. "Immigrants and Entrepreneurship: a Road for Talent or Just the Only Road?," Working Papers 2072/306519, Universitat Rovira i Virgili, Department of Economics.
    6. Ken Clark, 2015. "Ethnic minority self-employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 120-120, January.
    7. Marina De Angelis & Marcella Corsi & Daniele Frigeri, 2017. "The determinants of entrepreneurship for migrants in Italy. Do Italian migrants become entrepreneurs by “opportunity” or through “necessity”?," Working Papers CEB 17-031, ULB -- Universite Libre de Bruxelles.
    8. Hao, Li & Houser, Daniel & Mao, Lei & Villeval, Marie Claire, 2016. "Migrations, risks, and uncertainty: A field experiment in China," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 126-140.
    9. Catia Batista & Ana Isabel Costa, 2016. "Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey," FEUNL Working Paper Series novaf:wp1601, Universidade Nova de Lisboa, Faculdade de Economia.
    10. Sumit S. Deole & Marc Oliver Rieger, 2023. "The immigrant-native gap in risk and time preferences in Germany: levels, socio-economic determinants, and recent changes," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 743-778, April.
    11. Zovanga L. Kone & Isabel Ruiz & Carlos Vargas-Silva, 2021. "Self-employment and reason for migration: are those who migrate for asylum different from other migrants?," Small Business Economics, Springer, vol. 56(3), pages 947-962, February.
    12. Batista, Catia & McIndoe Calder, Tara & Vicente, Pedro C., 2014. "Return Migration, Self-Selection and Entrepreneurship in Mozambique," IZA Discussion Papers 8195, Institute of Labor Economics (IZA).
    13. Li, Yan & Ye, Hang, 2018. "Effect of the migration mechanism based on risk preference on the evolution of cooperation," Applied Mathematics and Computation, Elsevier, vol. 320(C), pages 621-632.
    14. Catia Batista & Tara McIndoe-Calder & Pedro C. Vicente, 2017. "Return Migration, Self-selection and Entrepreneurship," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(5), pages 797-821, October.
    15. Alain Kikandi Kiuma & Abdelkrim Araar & Christian Kamala Kaghoma, 2020. "Internal migration and youth entrepreneurship in the Democratic Republic of the Congo," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 790-814, August.
    16. Alain Kikandi Kiuma & Christian Kamala Kaghoma & Joelle Mukenyi Kalala & Allegra Kabamba Mbuyi, 2015. "Mobilité interne et entrepreneuriat des jeunes en République démocratique du Congo," Working Papers PMMA 2015-07, PEP-PMMA.

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    More about this item

    Keywords

    Migration; Risk aversion; Entrepreneurship; Self-employment;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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