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Journal of Population Economics

, Volume 15, Issue 1, pp 83–114 | Cite as

Labor market assimilation and the self-employment decision of immigrant entrepreneurs

  • Magnus Lofstrom

Abstract.

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Self-employed immigrants are found to do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives' wage/salary earnings at about age 30 and natives' self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrant-native earnings gap by, on average, 14%.

JEL classification: J15, J23, J61 
Key words: Immigration, assimilation, self-employment 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Magnus Lofstrom
    • 1
  1. 1.University of California, Irvine, School of Social Sciences, 3151 Social Science Plaza, Irvine CA 92697-5100, USA (Fax: +949-824-4717; e-mail: mlofstro@uci.edu)US

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