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


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 



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.


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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

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