Self-Employment and Earnings among High-Skilled Immigrants in the United States (Working Paper #13)

Magnus Lofstrom, Institute for the Study of Labor, Bonn

Abstract: This paper uses data from the 1980 and 1990 U.S. Censuses to analyze the labor market experience of high-skilled immigrants relative to high-skilled natives. Immigrants are found to be more likely to be working in one of the high-skilled occupations than natives, but the gap between the two groups decreased in the 1980’s. Given the high selfemployment rates of this group of workers, about 20 percent, it is important to study this aspect of the labor market experience. High-skilled natives are more likely to be selfemployed than high-skilled immigrants. Models of the self-employment decision, controlling for differences in socio-economic background, occupation, regional differences in immigrant population proportions, national origin and ethnicity, are estimated. Evidence of positive enclave effects on self-employment probabilities is found. Predicted earnings of self-employed immigrants are higher throughout most of their work life relative to wage/salary immigrants and natives, as well as compared to self-employed natives. Furthermore, there appears to be very little difference in predicted earnings across national origin group of self-employed immigrants. The low variation in predicted earnings across country of origin groups is not found for wage/salary immigrants.

Working Paper #13»