Immigrant-native differences in long-term self-employment

Abstract

We study immigrant-native differences in long-term self-employment in Sweden combining population-wide register data and a unique survey targeting a large representative sample of the total population of long-term self-employment. Using the registers, we analyze the evolution of labor and capital incomes during the first 10 years following self-employment entry. We find that immigrant-native differences in labor income become smaller, whereas immigrant-native differences in capital income grow stronger, over the course of self-employment. These findings are robust to controlling for factors such as organizational form and type of industry. We use the survey data to gain further insights into immigrant-native differences among the long-term self-employed, and show that immigrant self-employed experience more problems and earn less, but work harder than native self-employed. They also have a less personal relation to their customers, do not enjoy their work as much as natives, and appear to have different perspectives on self-employment in general.