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What Makes an Entrepreneur and Does It Pay? Native Men, Turks, and Other Migrants in Germany

Author

Listed:
  • Constant, Amelie F.

    (Temple University)

  • Shachmurove, Yochanan

    (City College of New York)

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

This paper focuses on the entrepreneurial endeavors of immigrants and natives in Germany. We pay closer attention to Turks, since they are the largest immigrant group with a strong entrepreneurial tradition, and the self-employed Turks in Germany represent about 70% of all Turkish entrepreneurs in the European Union. We identify the characteristics of the selfemployed individuals and understand their underlying drive into self-employment. At the same time we investigate how immigrant entrepreneurs fare in the labor market compared to natives. Employing data from the German Socioeconomic Panel 2000 release we find that the probability of self-employment increases significantly with age for all groups albeit at a decreasing rate. Among immigrants, Turks are twice as likely to choose self-employment as any other immigrant group. The age-earnings profiles of self-employed German and immigrant men are concave and surprisingly similarly shaped. While for self-employed German men hours of work and Treiman prestige scale scores increase their earnings, for self-employed immigrant men it is the longevity of the business that makes a difference. Everything else equal, the earnings of self-employed Turks are no different than the earnings of the self-employed Greeks, Italians, Spaniards, ex-Yugoslavs, Polish or other East Europeans, including those immigrants who have become German citizens.

Suggested Citation

  • Constant, Amelie F. & Shachmurove, Yochanan & Zimmermann, Klaus F., 2003. "What Makes an Entrepreneur and Does It Pay? Native Men, Turks, and Other Migrants in Germany," IZA Discussion Papers 940, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp940
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    References listed on IDEAS

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    Cited by:

    1. Yochanan Shachmurove, 2009. "Economic Geography, Venture Capital and Focal Points of Entrepreneurial Activity," PIER Working Paper Archive 09-032, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    2. Hussain M. Al Obaid, 2020. "Examining the motivation factors for individuals choosing self-employment: An assessment on Saudi labor market," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(5), pages 150-159, September.
    3. Yochanan Shachmurove, 2007. "Geography and Industry Meets Venture Capital," PIER Working Paper Archive 07-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    4. Y Georgellis & J G Sessions & N Tsitsianis, 2005. "Self-Employment Longitudinal Dynamics: A Review of the Literature," Economic Issues Journal Articles, Economic Issues, vol. 10(2), pages 51-84, September.
    5. Joachim Ragnitz & Stefan Eichler & Beate Henschel & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 41, November.
    6. Constant, Amelie F. & Zimmermann, Klaus F., 2004. "Self-Employment Dynamics Across the Business Cycle: Migrants Versus Natives," IZA Discussion Papers 1386, Institute of Labor Economics (IZA).
    7. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute of Labor Economics (IZA).
    8. Elisabeth Mueller, 2014. "Entrepreneurs from low-skilled immigrant groups in knowledge-intensive industries: company characteristics, survival and innovative performance," Small Business Economics, Springer, vol. 42(4), pages 871-889, April.
    9. Constant, Amelie F., 2004. "Immigrant versus Native Businesswomen: Proclivity and Performance," IZA Discussion Papers 1234, Institute of Labor Economics (IZA).
    10. Theuer, Sebastian & Gottschalk, Sandra, 2008. "Die Auswirkungen des demografischen Wandels auf das Gründungsgeschehen in Deutschland," ZEW Discussion Papers 08-032, ZEW - Leibniz Centre for European Economic Research.
    11. S. Longhi & P. Nijkamp & J. Poot, 2010. "Joint impacts of immigration on wages and employment: review and meta-analysis," Journal of Geographical Systems, Springer, vol. 12(4), pages 355-387, December.
    12. Yochanan Shachmurove, 2006. "An Excursion into the Venture Capital Industry Stratified by Locations and Industries 1996-2005," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(3), pages 79-104, Fall.
    13. Aki Harima, 2015. "Motivation of Japanese Descending Diaspora Entrepreneurs (Motywacja przedsiebiorcow diaspory japonskiej bedacych potomkami emigrantow)," Research Reports, University of Warsaw, Faculty of Management, vol. 2(19), pages 22-36.

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    More about this item

    Keywords

    wage differentials; occupational choice; self-employment; entrepreneurship; immigrants;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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