Skip to main content
SpringerLink
Log in

Transmission of self-employment across immigrant generations: the importance of ethnic background and gender

  • Published:
Review of Economics of the Household Aims and scope Submit manuscript

Abstract

This paper studies the intergenerational transmissions of self-employment abilities among immigrants in Sweden. The results show that second-generation immigrants are over-represented in self-employment compared to natives. Male immigrants from countries neighbouring to Sweden and natives alike seem to use both mothers and fathers as role models in their self-employment decision, but the father is the stronger role model among male immigrants from more geographically distant regions. Female immigrants use both their father and their mother as role models in their self-employment decision. Furthermore, male immigrants and male natives tend to become self-employed in the same business sector as their fathers; female immigrants and female natives with self-employed parents are over-represented in self-employment but not necessarily in the same business sector as their parents.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. For an overview of the labour market adjustment among immigrants in different countries see the special issue on this subject in the Review of Economics of the Household (2010), 8(1).

  2. We follow the theoretical framework used by Evans and Jovanovic (1989), Holtz-Eakin et al. (1994) and Dunn and Holtz-Eakin (2000).

  3. The table only includes the coefficients for the variables of certain interest. The full estimations immigrants and natives and for each immigrant group are available from the authors upon request.

  4. We have also estimated our probit model including individuals in the age span 25–64 years of age. In all essential the results turned out the same.

  5. In order to deal with the fact that self-employed mothers might be a selected group we ran regressions for children in single female-headed households as a sensitivity analysis. The transmissions across generations remained in all essential unchanged.

  6. The table only includes the coefficients for the variables of certain interest. The results from the full estimations are available from the authors upon request.

  7. As for the probit model the results remained stable when we estimated our multinomial model including individuals in the age span 25–64 years of age.

References

  • Andersson, L., & Hammarstedt, M. (2010a). Intergenerational transmissions in immigrant self-employment: Evidence from three generations. Small Business Economics, 34(3), 261–276.

    Article  Google Scholar 

  • Andersson, L., & Hammarstedt, M. (2010b). Self-employment matching: an analysis of dual-earner couples in Sweden. Economics Bulletin, 30(3), 2197–2209.

    Google Scholar 

  • Andersson-Joona, P. (2010). Exits from self-employment: Is there a native-immigrant difference in Sweden? International Migration Review (forthcoming).

  • Aydemir, A., Chen, W. H., & Corak, M. (2009). Intergenerational earnings mobility among the children of Canadian immigrants. Review of Economics and Statistics, 91(2), 377–397.

    Article  Google Scholar 

  • Blanchflower, D. G., & Oswald, A. J. (1998). What makes an entrepreneur? Journal of Labor Economics, 16(1), 26–60.

    Article  Google Scholar 

  • Borjas, G. J. (1986). The self-employment experience of immigrants. Journal of Human Resources, 21(4), 487–506.

    Article  Google Scholar 

  • Borjas, G. J. (1987). Self-selection and the earnings of immigrants. American Economic Review, 77(4), 531–553.

    Google Scholar 

  • Borjas, G. J. (1994). The economics of immigration. Journal of Economic Literature, 32(4), 1667–1771.

    Google Scholar 

  • Çelikaksoy, A., Skyt Nielsen, H., & Verner, M. (2006). Marriage migration: Just another case of positive assortative matching? Review of Economics of the Household, 4(3), 253–275.

    Article  Google Scholar 

  • Chadwick, L., & Solon, G. (2002). Intergenerational income mobility among daughters. American Economic Review, 92(1), 335–344.

    Article  Google Scholar 

  • Chiswick, B. R., & Houseworth, C. (2010). Ethnic intermarriage among immigrants: Human capital and assortative mating. Review of Economics of the Household (forthcoming). doi: 10.1007/s11150-010-9099-9.

  • Clark, K., & Drinkwater, S. (2000). Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales. Labour Economics, 7(5), 603–628.

    Article  Google Scholar 

  • Constant, A., & Zimmermann, K. F. (2006). The making of entrepreneurs in Germany: Are immigrants and natives alike? Small Business Economics, 26(3), 279–300.

    Article  Google Scholar 

  • Dunn, T., & Holtz-Eakin, D. (2000). Financial capital, human capital, and the transition to self-employment: Evidence from intergenerational links. Journal of Labor Economics, 18(2), 282–305.

    Article  Google Scholar 

  • Ekberg, J. (1991). Vad hände sedan? En studie av utrikes födda på arbetsmarknaden (What happened next? A study of foreign born in the labour market). Växjö: ACTA Wexionensia, Växjö University.

    Google Scholar 

  • Evans, D. S., & Jovanovic, B. (1989). An estimated model of entrepreneurial choice under liquidity constraints. Journal of Political Economy, 97(4), 808–827.

    Article  Google Scholar 

  • Evans, D. S., & Leighton, L. S. (1989). Some empirical aspects on entrepreneurship. American Economic Review, 79(3), 519–535.

    Google Scholar 

  • Fairlie, R. W. (1999). The absence of the African-American owned businesses: An analysis of the dynamics of self-employment. Journal of Labor Economics, 17(1), 80–108.

    Article  Google Scholar 

  • Fairlie, R. W., & Meyer, B. D. (1996). Ethnic and racial self-employment differences and possible explanations. Journal of Human Resources, 31(4), 757–793.

    Article  Google Scholar 

  • Fairlie, R. W., & Robb, A. M. (2007). Why are black-owned businesses less successful than white-owned businesses? The role of families, inheritances, and business human capital. Journal of Labor Economics, 25(2), 289–323.

    Article  Google Scholar 

  • Hammarstedt, M. (2001a). Immigrant self-employment in Sweden—its variation and some possible determinants. Entrepreneurship and Regional Development, 13(2), 147–161.

    Article  Google Scholar 

  • Hammarstedt, M. (2001b). Making a living in a new country. Dissertation in Economics, Växjö University.

  • Hammarstedt, M. (2004). Self-employment among immigrants in Sweden—an analysis of intragroup differences. Small Business Economics, 23(2), 115–126.

    Article  Google Scholar 

  • Hammarstedt, M. (2006). The predicted earnings differential and immigrant self-employment in Sweden. Applied Economics, 38(6), 619–630.

    Article  Google Scholar 

  • Hammarstedt, M. (2009). Intergenerational mobility and the earnings position of first-, second-, and third-generation immigrants. Kyklos, 62(2), 275–292.

    Article  Google Scholar 

  • Hammarstedt, M., & Shukur, G. (2009). Testing the home-country self-employment hypothesis on immigrants in Sweden. Applied Economics Letters, 16(7), 745–748.

    Article  Google Scholar 

  • Hirvonen, L. (2008). Intergenerational earnings mobility among daughters and sons: Evidence from Sweden and a comparison with the United States. American Journal of Economics and Sociology, 67(5), 777–826.

    Article  Google Scholar 

  • Holtz-Eakin, D., Joulfaian, D., & Rosen, H. (1994). Entrepreneurial decision and liquidity constraints. Rand Journal of Economics, 25(2), 334–347.

    Article  Google Scholar 

  • Hout, M., & Rosen, H. (2000). Self-employment, family background, and race. Journal of Human Resources, 35(4), 670–691.

    Article  Google Scholar 

  • Hundley, G. (2006). Family background and the propensity for self-employment. Industrial Relations, 45(3), 377–392.

    Google Scholar 

  • Le, A. T. (2000). The determinants of immigrant self-employment in Australia. International Migration Review, 34(1), 183–214.

    Article  Google Scholar 

  • Lentz, B. F., & Laband, D. N. (1983). Occupational inheritance in agriculture. American Journal of Agricultural Economics, 65(2), 311–314.

    Article  Google Scholar 

  • Lentz, B. F., & Laband, D. N. (1990). Entrepreneurial success and occupational inheritance among proprietors. Canadian Journal of Economics, 23(3), 563–579.

    Article  Google Scholar 

  • Österberg, T. (2000). Intergenerational income mobility in Sweden: What do tax data show? Review of Income and Wealth, 46(4), 421–436.

    Article  Google Scholar 

  • Review of Economics of the Household. (2010). Special issue on the labor market adjustment of immigrants, 8(1).

  • Yuengert, A. M. (1995). Testing hypotheses of immigrant self-employment. Journal of Human Resources, 30(1), 194–204.

    Article  Google Scholar 

Download references

Acknowledgments

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. We are grateful for valuable comments from the editor Shoshana Grossbard, from two anonymous referees, from Erik Mellander and Ali M. Ahmed, from seminar participants at Linnaeus University, from participants at the SNEE-conference in Mölle 2010 as well as from participants at the SABE-conference in San Diego 2010.

Author information

Authors and Affiliations

  1. Department of Economics and Statistics, Linnaeus University, 351 95, Växjö, Sweden

    Lina Andersson & Mats Hammarstedt

Authors
  1. Lina Andersson
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Mats Hammarstedt
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Mats Hammarstedt.

Appendix

Appendix

See Tables 8, 9 and 10.

Table 8 Male self-employed in the second generation (20–64 years of age) in 2007 grouped by line of business, %
Full size table
Table 9 Female self-employed in the second generation (20–64 years of age) in 2007 grouped by line of business, %
Full size table
Table 10 Dependent and explanatory variables used in the probit and multinomial logit models
Full size table

Rights and permissions

Reprints and permissions

About this article

Cite this article

Andersson, L., Hammarstedt, M. Transmission of self-employment across immigrant generations: the importance of ethnic background and gender. Rev Econ Household 9, 555–577 (2011). https://doi.org/10.1007/s11150-010-9102-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11150-010-9102-5

Keywords

JEL Classification

Search

Navigation