Advertisement

The Annals of Regional Science

, Volume 50, Issue 3, pp 885–910 | Cite as

Ethnic origin, local labour markets and self-employment in Sweden: a multilevel approach

  • Lina Andersson
  • Mats Hammarstedt
  • Shakir Hussain
  • Ghazi ShukurEmail author
Original Paper
  • 470 Downloads

Abstract

We investigate the importance of ethnic origin and local labour markets conditions for self-employment propensities in Sweden. In line with previous research, we find differences in the self-employment rate between different immigrant groups as well as between different immigrant cohorts. We use a multilevel regression approach in order to quantify the role of ethnic background, point of time for immigration and local market conditions in order to further understand differences in self-employment rates between different ethnic groups. We arrive at the following: The self-employment decision is to a major extent guided by factors unobservable in register data. Such factors might be, that is, individual entrepreneurial ability and access to financial capital. The individual’s ethnic background and point of time for immigration play a smaller role for the self-employment decision but are more important than local labour market conditions.

JEL Classification

J15 R23 

Notes

Acknowledgments

This paper is part of the project “Intergenerational redistribution among immigrants—Does that explain self-employment and local labour market differences?” financed by The Swedish Council for Working Life and Social Research (FAS). Financial support is gratefully acknowledged. The authors are also thankful for comments from two anonymous referees as well as from the editor. Finally, the authors are thankful for comments from colleagues and seminar participants at the Linnaeus University Centre for Labour Market and Discrimination Studies.

References

  1. Andersson-Joona P (2010) Exits from self-employment: is there a native-immigrant difference in Sweden? Int Migr Rev 44:539–559CrossRefGoogle Scholar
  2. Andersson L, Hammarstedt M (2010) Intergenerational transmissions in immigrant self-employment: Evidence from three generations. Small Bus Econ 34:261–276CrossRefGoogle Scholar
  3. Andersson L, Hammarstedt M (2011) Transmission of self-employment across immigrant generations: the importance of ethnic background and gender. Rev Econ Househ 9:555–577CrossRefGoogle Scholar
  4. Andersson L, Hammarstedt M (2012) Ethnic enclaves, networks and self-employment among middle Eastern immigrants in Sweden. Int Migr (forthcoming)Google Scholar
  5. Borjas GJ (1986) The self-employment experience of immigrants. J Human Resour 21:487–506CrossRefGoogle Scholar
  6. Clark K, Drinkwater S (2000) Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales. Labour Economics 7:603–628CrossRefGoogle Scholar
  7. Constant A, Zimmermann KF (2006) The making of entrepreneurs in Germany: are immigrants and natives alike? Small Bus Econ 26:279–300CrossRefGoogle Scholar
  8. Evans MDR (1989) Immigrant entrepreneurship: effects of ethnic market size and isolated labor pool. Am Sociol Rev 54:950–962CrossRefGoogle Scholar
  9. Fairlie RW (1999) The absence of the African-American owned businesses: an analysis of the dynamics of self-employment. J Labor Econ 17:80–108CrossRefGoogle Scholar
  10. Fairlie RW, Meyer BD (1996) Ethnic and racial self-employment differences and possible explanations. J Human Resour 31:757–793CrossRefGoogle Scholar
  11. Gelman A, Hill J (2007) Data analysis using regression and multilevel/hierarchical models. Cambridge University Press, New YorkGoogle Scholar
  12. Hammarstedt M (2001a) Immigrant self-employment in Sweden—its variation and some possible determinants. Entrepreneurship Reg Dev 13:147–161CrossRefGoogle Scholar
  13. Hammarstedt M (2001b) Making a living in a new country. PhD thesis. Växjö UniversityGoogle Scholar
  14. Hammarstedt M (2003) Income from work among immigrants in Sweden. Rev Income Wealth 49:185–203CrossRefGoogle Scholar
  15. Hammarstedt M (2004) Self-employment among immigrants in Sweden—an analysis of intragroup differences. Small Bus Econ 23:115–126CrossRefGoogle Scholar
  16. Hammarstedt M (2006) The predicted earnings differential and immigrant self-employment in Sweden. Appl Econ 38:619–630CrossRefGoogle Scholar
  17. Hammarstedt M (2009) Predicted earnings and the choice between self-employment and wage-employment—evidence from Sweden. Int J Manpow 30:349–359CrossRefGoogle Scholar
  18. Hammarstedt M, Shukur G (2006) Immigrants’ relative earnings in Sweden—a cohort analysis. Labour 20:285–323CrossRefGoogle Scholar
  19. Hammarstedt M, Shukur G (2007) Immigrants’ relative earnings in Sweden—a quantile regression approach. Int J Manpow 28:456–473CrossRefGoogle Scholar
  20. Hammarstedt M, Shukur G (2009) Testing the home-country self-employment hypothesis on immigrants in Sweden. Appl Econ Lett 16:745–748CrossRefGoogle Scholar
  21. Hout M, Rosen H (2000) Self-employment, family background, and race. J Human Resour 35:670–691CrossRefGoogle Scholar
  22. Hox J (2002) Multilevel analysis: techniques and applications. Lawrence Erlbaum Associates, Publishers, Mahwah, New JerseyGoogle Scholar
  23. Kloosterman R, van der Leun J, Rath J (1998) Across the border. Immigrants’ economic opportunities, social capital and informal business activities. J Ethnic Migr Stud 24:249–268CrossRefGoogle Scholar
  24. Kloosterman R, Rath J (2001) Immigrant entrepreneurs in advanced economies: mixed embededdness further explored. J Ethnic Migr Stud 27:189–202CrossRefGoogle Scholar
  25. Le AT (2000) The determinants of immigrant self-employment in Australia. Int Migr Rev 34:183–214CrossRefGoogle Scholar
  26. Light I (1979) Disadvantaged minorities in self-employment. Int J Compar Sociol 20:31–45CrossRefGoogle Scholar
  27. Ohlsson H, Broomé P, Bevelander P (2012) The self-employment among immigrants and natives in Sweden. Entrepreneurship Reg Dev (forthcoming)Google Scholar
  28. Parker C (2004) The economics of self-employment and entrepreneurship. Cambridge University Press, New YorkCrossRefGoogle Scholar
  29. Ram M, Theodorakoupoulos N, Jones T (2008) Forms of capital, mixed embeddedness and Somali enterprise. Work Employ Soc 22:427–446CrossRefGoogle Scholar
  30. SCB, MIS 2007:1, regional divisions in Sweden on 1 January 2007Google Scholar
  31. Yuengert AM (1995) Testing hypotheses of immigrant self-employment. J Human Resour 30:194–204CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  • Lina Andersson
    • 1
  • Mats Hammarstedt
    • 1
  • Shakir Hussain
    • 2
  • Ghazi Shukur
    • 1
    • 3
    Email author
  1. 1.Department of Economics and StatisticsLinnaeus University Växjö Sweden
  2. 2.School of MedicineUniversity of BirminghamBirminghamUK
  3. 3.Department of Economics, Finance and StatisticsJönköping International Business SchoolJönköpingSweden

Personalised recommendations