The Self-Employment of Immigrants

The opinions expressed in the paper are those of the author and do not necessarily reflect the views of the Rockefeller Foundation, DHHS, or the Institute. ABSTRACT Self-employment represents an important component of the immigrant experience in the U.S. labor market. Among large immigrant groups self-employment rates exceed 15 percent of the labor force. This paper begins the study of the immigrant self-employment experience by analyzing self-employment rates and incomes of 18 immigrant cohorts using the 1970 and 1980 U.S. Census. The major findings are these: 1. Assimilation has a sizable impact on self-employment probabilities: The longer the immigrant resides in the United States, the higher the probability of self-employment. 2. There has been a rapid increase in the self-employment rates experienced by recent immigrant cohorts as compared to earlier cohorts. These across-cohort changes have been caused by the relative decline of opportunities faced by immigrants in the salaried sector over the last decades. 3. Immigrants are more likely to be self-employed than similarly skilled native-born workers. A major reason for this differential is that geographic enclaves of immigrants increase self-employment opportunities , particularly for immigrants who share the same national background as the residents of the enclave.