Do the Falling Earnings of Immigrants Apply to Self-employed Immigrants?

Many studies have examined the relative success of immigrant men in the (primarily paid) workforce. Despite the fact that they represent approximately one-sixth of the immigrant workforce, self-employed immigrants are a relatively understudied group. This study uses the 1981, 1986, 1991, and 1996 Census files to assess the success of self-employed immigrant men (compared with self-employed native-born men), using the relative success of paid immigrant men as the benchmark. After controlling for various other factors, recent immigrants (those arriving within the last five years) are as likely to be self-employed as the native-born and, over time spent in the country, are more likely to become self-employed. Recent immigrants in the 1990s were far more likely to be self-employed than the native-born. Successive cohorts of recent immigrants have fared progressively worse in the paid labour market compared with paid native-born workers. This is not the case in the self-employed workforce. Although self-employed recent immigrants typically report lower net self-employment income upon entry than the self-employed native-born, the gap has not grown. Instead, it has followed a cyclical movement: narrowing at the peak, and widening in times of weaker economic activity.