Linking Self-Employment Before And After Migration: Migrant Selection And Human Capital

Abstract

In linking self-employment before and after migration, the often-cited home-country selfemployment hypothesis states that immigrants who come from countries with large self-employment sectors are themselves more likely to have been self-employed and hence have a higher propensity for self-employment in their destination country. Using Swedish data, this study shows that the first of the hypothesis, that origin-country average rates of self-employment can be used to approximate second part, the connection between self-employment before and after migration, is true if the measurement is done on the individual level. Migrants who have been self-employed before migration accumulate entrepreneurial human capital, making future of migrant selection, this association cannot be captured by aggregate measures, and this is the reason why the home-country self-employment hypothesis, although intuitive, has underperformed in previous empirical tests