Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1361: Ethnic Differences in Long-Term Self-Employment

Lina Aldén, Spencer Bastani, Mats Hammarstedt () and Chizheng Miao ()
Additional contact information
Lina Aldén: Department of Economics and Statistics, Linnaeus University
Spencer Bastani: Institute for Evaluation of Labour Market and Education Policy (IFAU), Postal: Linmnaeus University, Uppsala Center for Fiscal Studies (UCFS), Uppsala Center for Labor Studies (UCLS), CESIfo
Mats Hammarstedt: Department of Economics and Statistics, Linnaeus University, Postal: and Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Swedenan
Chizheng Miao: Department of Economics and Statistics, Linnaeus University

Abstract: We study ethnic differences in long-term self-employment in Sweden combining population-wide register data and a unique survey targeting a large representative sample of the total population of long-term self-employed. Using the registers, we analyze the evolution of labor and capital income during the first ten years following self-employment entry. We find that, while ethnic differences in labor income become smaller over time, ethnic differences in capital income grow stronger during the course of self-employment. These findings are robust to controlling for factors such as organizational form and type of industry. We use the survey data to gain further insights into these differences, and show that immigrant self-employed experience more problems, earn less, but work harder than native self-employed. They also have a less personal relation to their customers, do not enjoy their work as much as natives, and appear to have different perspectives on self-employment in general.

Keywords: Self-employment; Immigration; Integration; Long-term; survey

JEL-codes: D31; J15; J24; L26

46 pages, October 6, 2020

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