Scandinavian Working Papers in Economics

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

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

Lina Andersson (), Mats Hammarstedt (), Shakir Hussain () and Ghazi Shukur ()
Additional contact information
Lina Andersson: Linnaeus University, Postal: Department of Economics and Statistics, Linnaeus University, SE-351 95 Växjö, Sweden
Mats Hammarstedt: Linnaeus University, Postal: Department of Economics and Statistics, Linnaeus University, SE-351 95 Växjö, Sweden
Shakir Hussain: University of Birmingham, Postal: School of Medicine, University of Birmingham, Birmingham, United Kingdom
Ghazi Shukur: Jönköping International Business School & Linnaeus University, Postal: Department of Economics, Finance and Statistics, Jönköping International Business School, SE- 551, &, Department of Economics and Statistics, Linnaeus University, SE-351 95 Växjö, Sweden, ,

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

JEL-codes: J15; R23

22 pages, November 11, 2011

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