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The predicted earnings differential and immigrant self-employment in Sweden

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  • Mats Hammarstedt

Abstract

This paper investigates the influence of the predicted earnings differential between self-employment and wage-employment on self-employment propensities among immigrants in Sweden. Immigrants from non-European countries have essentially lower earnings from self-employment and wage-employment than immigrants from European countries. It is found that the difference between an immigrant's predicted earnings in self- and wage-employment has a strong influence on an immigrant's self-employment decision. A one unit increase in the log differential between self-employment and wage-employment earnings increase the self-employment rate among immigrants by about 5 percentage points, suggesting that discriminatory wages in the wage-employment sector may push immigrants towards self-employment.

Suggested Citation

  • Mats Hammarstedt, 2006. "The predicted earnings differential and immigrant self-employment in Sweden," Applied Economics, Taylor & Francis Journals, vol. 38(6), pages 619-630.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:6:p:619-630
    DOI: 10.1080/00036840500397069
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    References listed on IDEAS

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