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

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%.

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Received: 10 November 1999/Accepted: 3 August 2000

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Lofstrom, M. Labor market assimilation and the self-employment decision of immigrant entrepreneurs. J Popul Econ 15, 83–114 (2002). https://doi.org/10.1007/PL00003841

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