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CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology KTH/CESIS Working Paper Series in Economics and Institutions of Innovation

No 261:
Ethnic origin, local labour markets and self-employment in Sweden: A Multilevel Approach

Lina Andersson (), Mats Hammarstedt (), Shakir Hussain () and Ghazi Shukur ()

Abstract: We investigate the importance of ethnic origin and local labour markets conditions for self-employment propensities in Sweden. In line with previous research we find differences in the self-employment rate between different immigrant groups as well as between different immigrant cohorts. We use a multilevel regression approach in order to quantify the role of ethnic background, point of time for immigration and local market conditions in order to further understand differences in self-employment rates between different ethnic groups. We arrive at the following: The self-employment decision is to a major extent guided by factors unobservable in register data. Such factors might be i.e. individual entrepreneurial ability and access to financial capital. The individual’s ethnic background and point of time for immigration play a smaller role for the self-employment decision but are more important than local labour market conditions.

Keywords: Self-employment; immigrant background; local labour market; (follow links to similar papers)

JEL-Codes: J15; R23; (follow links to similar papers)

22 pages, November 11, 2011

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