Is Self-Employment for Migrants? Evidence from Italy

Using a unique Italian dataset covering the period from 2004 to 2020, we assess the immigrant-native gap in entrepreneurship and investigate potential channels behind it. The data allow us to account for many observable individual, household and migration-related characteristics, as well as for risk aversion, which is typically not observed but is crucial for self-employment decision. In addition, we are also able to incorporate firm-specific factors into the analysis, such as firm size and firm age. Unlike most existing studies, we find that immigrants in Italy are less likely to be self-employed. This negative gap is confirmed when using propensity score matching methodology. The negative gap is not significant for mixed immigrant-native couples, suggesting that intermarriage may constitute an important additional assimilation channel. Moreover, we find some evidence that the negative gap is largely driven by self-employed with employees and is present only in older firms.