Testing the home-country self-employment hypothesis on immigrants in Sweden

Abstract

This article tests the home-country self-employment hypothesis on immigrants in Sweden. The results show that the self-employment rates vary between different immigrant groups but we find no support for the home-country self-employment hypothesis using traditional estimation methods. However, when applying quantile regression method we find such evidence when testing results from the 90th quantile. This indicates that home-country self-employment traditions are important for the self-employment decision among immigrant groups with high self-employment rates in Sweden. Furthermore, the result underlines the importance of utilizing robust estimation methods when the home-country self-employment hypothesis is tested.

Notes

¹ See Borjas (1986), Yuengert (1995), Fairlie and Meyer (1996), Clark and Drinkwater (2000), Le (2000) and Hammarstedt (2006).

² See Frazier (1957) and Light (1984).

³ See Hammarstedt (2006).

⁴ Immigrants from these countries constitute about 70% of the total number of immigrants in Sweden.

⁵ The explanatory variables are presented in more detail in accordance to Table 2.

Table 2. Probit estimations of the probability of being self-employed

⁶ See Rogers (1992).