Low-skilled immigrant entrepreneurship

More than ? of the foreign born workforce in the US have no schooling beyond high school and about 20% of the low-skilled workforce are immigrants. More than 10% of these low-skilled immigrants are self-employed. Utilizing longitudinal data from the 1996, 2001 and 2004 Survey of Income and Program Participation panels, this paper analyzes the returns to self-employment among low-skilled immigrants. We find that the returns to low-skilled self-employment among immigrants is higher than it is among natives but also that wage/salary employment is a more financially rewarding option for most low-skilled immigrants. In analyses of earnings differences, we find that most of the 20% male native-immigrant earnings gap among low-skilled business owners can be explained primarily by differences in the ethnic composition. Low-skilled female foreign born entrepreneurs are found to have earnings roughly equal to otherwise observationally similar self-employed native born women.     

The effect of immigration on the earnings of native-born workers: Evidence from Australia

No consensus has been reached by previous studies on the impact of immigration on the earnings of natives. Using data from the Australia's 2001 Census of Population and Housing an individual-level earnings function is estimated by including the fraction of immigrants in a given skill group relative to total employment in that skill group as one of the independent variables. Using employees’ occupation and level of education as proxies for skill, the results indicate that generally immigrants have a significant positive effect on earnings of natives. The overall findings suggest that the increase in supply of labour due to immigration is offset by higher demand for labour and hence positive effect on native earnings.     

Labor market outcomes of immigrant women in the United States: 1970 to 1990

42% of immigrant workers in the US are women. Data from the 1970, 1980, and 1990 US censuses are analyzed in the study of differences in labor market outcomes between US-born and immigrant women, and among immigrant women born in different countries or regions of the world. There was little difference between US-born and immigrant women as a whole in 1970. However, over the next 20 years, immigrants women's labor force participation rate and weekly earnings relative to natives became lower, and their unemployment rates became higher. By 1990, the wage gap was 14%. At the same time, the share of self-employed women and the amount of time worked among employed women were almost the same for immigrant women and the US-born throughout the period 1970-90. Immigrants born in the UK, Canada, Europe, Japan, Korea, China, the Philippines, and the Middle East have had steady or improved wages and unemployment relative to US-born women. Immigrants from Mexico and Central America have experienced relatively high unemployment and low earnings, with the wage gap reaching 35% in 1990. Disparities in the number of completed years of schooling explains a substantial share of the observed differences in labor market outcomes.     

Immigrants and Employer-provided Training

Much has been written about the labour market outcomes for immigrants in their host countries, particularly with regard to earnings, employment and occupational attainment. However, much less attention has been paid to the question of whether immigrants are as likely to receive employer-provided training relative to comparable natives. As such training should be crucial in determining the labour market success of immigrants in the long run it is a critically important question. Using data from a large-scale survey of employees in Ireland, we find that immigrants are less likely to receive training from employers, with immigrants from the New Member States of the EU experiencing a particular disadvantage. The immigrant training disadvantage arises in part from a failure on the part of immigrants to get employed by training-oriented firms. However, they also experience a training disadvantage relative to natives within firms where less training is provided.     

Self-employment and earnings among immigrants in Australia

This article contributes to the small Australian literature on the earnings of immigrants in the self-employment sector. Earnings functions for both the foreign-born and Australian-born are estimated, and the results show that compared with native-born workers, foreign-born workers have higher earnings in the wage/salary sector but lower earnings in the self-employment sector.
Among the foreign-born, the results suggest that self-employed immigrants are less skilled compared with those who are wage/salary employed. Thus, low-skilled immigrants may be forced into self-employment.
There is no evidence of immigrant "catch-up" in the self-employment sector. Among wage/salary workers, however, immigrant wages are characterized by a "catch-up" effect.     

Wage Gap Paradox: The Case of Immigrants from the FSU in Israel

The purpose of this article was to investigate whether some groups of immigrants are particularly disadvantaged in their earnings compared to other population groups, to what extent wage gaps arise from discriminatory remuneration, and how immigrants’ wages change over time. The contribution of this study is twofold: it conceptualizes a wage gap paradox and delineates the indicators of discrimination in terms of earnings. Data from the 2010‐2014 Social Surveys in Israel were used. The results revealed evidence of a wage gap paradox for immigrants from the former Soviet Union: the wage gaps between them and other population groups do not close during time living in the host country, despite the high level of their formal credentials. Applying the Blinder‐Oaxaca decomposition, the study revealed that a sufficient part of the wage gap is attributable to discrimination, which prevented immigrants from full economic integration.     

Recent Immigration to Canada and the United States: A Mixed Tale of Relative Selection

Using large‐scale census data and adjusting for sending‐country fixed effect to account for changing composition of immigrants, we study relative immigrant selection to Canada and the U.S. during 1990–2006, a period characterized by diverging immigration policies in the two countries. Results show a gradual change in selection patterns in educational attainment and host‐country language proficiency in favor of Canada as its post‐1990 immigration policy allocated more points to the human capital of new entrants. Specifically, in 1990, new immigrants in Canada were less likely to have a B.A. degree than those in the U.S.; they were also less likely to have a highschool or lower education. By 2006, Canada surpassed the U.S. in drawing highly educated immigrants, while continuing to attract fewer low‐educated immigrants. Canada also improved its edge over the U.S. in terms of host‐country language proficiency of new immigrants. Entry‐level earnings, however, do not reflect the same trend: Recent immigrants to Canada have experienced a wage disadvantage compared to recent immigrants to the U.S., as well as Canadian natives. One plausible explanation is that while the Canadian points system has successfully attracted more educated immigrants, it may not be effective in capturing productivity‐related traits that are not easily measurable.     

Membership and wage impact of right-to-work laws

This paper examines the effects of “Right-to-Work” laws on union membership and on the earnings of union and nonunion members. Using regression analysis, we find that once the simultaneous equations bias between the degree of unionization and RTW laws is eliminated, RTW laws have no statistically significant influence on union membership. Similarly, using a human-capital earnings model, we find that RTW laws have no significant influence on the wages of all workers, union workers, or nonunion workers. However, we did find evidence that such laws may promote aggressive union wage policies resulting in a larger union/nonunion relative wages advantage in RTW states than in non-RTW states.     

What Makes an Entrepreneur and Does it Pay? Native Men,Turks, and Other Migrants in Germany

This paper focuses on the entrepreneurial endeavours of immigrants' and natives in Germany, concentrating on Turks, Germany's largest immigrant group and one under‐studied in the literature. Self‐employed Turks in Germany represent about 70 per cent of all Turkish entrepreneurs in the European Union. We use data from the German Socio‐economic Panel to study patterns of self‐employment. First, we identify the characteristics of the self‐employed individuals and understand their underlying drive into self‐employment. Next we investigate how immigrant entrepreneurs fare in the labour market and compare their earnings to those of the natives. It is important for decision makers to understand entrepreneurial patterns so that they can shape policy that better fosters entrepreneurial activities. This paper presents several findings that can inform better policymaking. First, our investigation indicates that education is not decisive in determining whether one will choose self‐employment over salaried work nor in explaining earnings. The estimated age‐earnings profiles are the same for natives and immigrants, while the proclivity to become self‐employed is concave with respect to age for both groups. Immigrants' start with a higher probability to work than natives but have a slower increase in the self‐employment probabilities thereafter. The earnings of self‐employed immigrants' are higher initially, but their earnings path crosses eventually that of the natives. Second, we find some suggestion of ethnic entrepreneurial spirit. Turks are 70 per cent more likely to be self‐employed than any other immigrant group, although they do not necessarily earn more. These patterns should be further explored.     

Understanding the workweek of foreign born workers in the United States

I analyze the length of the workweek of foreign-born workers in the US I concentrate on workers supplying long hours of work—50 or more weekly hours and document that immigrants are less likely than natives to work long hours. Surprisingly, these differences are greatest among highly educated and salary paid workers, and persists even after conditioning for demographic characteristics. I explain these differences with two within occupation characteristics. First, relative to natives, immigrants are less likely to supply long work weeks if they work in occupations where the immigrant-native earnings differential is big. Second, immigrants are also less likely to supply long work weeks when they work in occupations with a wide dispersion of earnings. This second result is important, because the occupation dispersion of earnings has been used to characterize changes of the worker’s earnings over the worker life cycle (Bell and Freeman, Labour Economics: 8(2), 2001a; Working Time in Comparative Perspective, 2001b; Kuhn and Lozano, Journal of Labor Economics:26(2), 311–344, 2008), and a good measure of the incentives to supply long hours of work.     

Self‐Selection and Economic Assimilation of Immigrants: The Case of Iranian Immigrants Arriving to Three Countries During 1979–1985

The study is designed to evaluate the impact of the interaction between patterns of immigrants' self‐selection and the context of reception at destinations on economic assimilation of Iranian immigrants who came to three countries during 1979–1985. For that purpose, we studied immigrants at the age of 22 or higher upon arrival by utilizing the 5 percent 1990 and 2000 Public Use Microdata files (PUMS) of the United States census, the 20 percent demographic samples of the 1983 and 1995 Israeli censuses of population, and the 1990 and 2000 Swedish registers. The results indicate that the “most qualified” immigrants – both on observed and unobserved variables – who left Iran right after the Islamic revolution, arrived in the US Their positive self‐selection led them to reach complete earnings assimilation with natives there. Iranian immigrants who arrived in Israel and Sweden did not achieve full earnings assimilation with natives. Of these two groups, a smaller immigrant‐to‐native gap in average earnings was found in Sweden, but in the same time Iranian immigrants in Israel were more positively self‐selected and showed better assimilation than their counterparts in Sweden. Market structure played a certain role in immigrants' earnings assimilation mainly in Sweden.     

The Decomposition of Firm-size Wage Differentials

No completely satisfactory explanation for the persistent and well-documented large-firm wage premium has been found. I use a novel adaptation of the Oaxaca/Blinder wage discrimination model to examine the firm-size wage differential which allows the wage differential to be decomposed into the portions attributable to (1) differences in employee endowments, (2) how the firm values these endowments, and (3) residual differences. Small firms actually pay higher wages based on how they value their workers’ endowments, but this wage premium was overshadowed by the superior endowments of workers in large firms and a residual differential in favor of large firms.

Do Immigrants Catch‐up with the Natives in Terms of Earnings? Evidence from Individual Level Data of Canada

This article analyses differences in dynamic transitions into and out of any of the five hourly wage quintiles and quintile zero (unemployed and non‐employed people) between immigrants and natives for the period 1993‐2004. Using Longitudinal Level data from Survey of Labour and Income Dynamics (SLID) for men aged 25 to 55, we investigate how unobserved heterogeneity factors and initial conditions may affect individuals’ propensity to stay in or leave any of the wage quintiles. We also consider a dynamic multinomial logit model with the random effects approach. Empirical results show that state dependence exists in all hourly wage quintiles. Moreover, education, experience, marital status, immigrant minority status, and age at immigration are significant factors determining hourly wage differentials between immigrants and natives.     

Occupational downgrading and wages of New Member States immigrants to Ireland

This paper explores the importance of occupational downgrading in explaining the pay gap of New Member States (NMS) immigrants to Ireland by taking advantage of two data sources, the Census and the Survey on Income and Living Conditions (SILC). The study identifies biases in the coverage of NMS immigrants in SILC that dampen their estimated earnings disadvantage. Corrections to population weights are suggested. These adjustments have a significant impact on results, increasing both the size of the wage penalty of NMS immigrants and the extent to which the pay gap can be explained by occupational downgrading. A replication of published results for the UK reveals similar patterns of penalties for NMS workers in both countries. Factors that may explain the concentration of NMS workers in low‐skill/low‐wage occupations are discussed.     

Earnings differences among the Mexican-origin population in the United States: nativity and citizenship explanations

The authors "use data from the June 1986 Current Population Survey to investigate nativity and citizenship differences in earnings within the Mexican-origin population in the United States. There is no evidence of any ?costs' of nativity or citizenship status. Rather, the existing variation appears to be more than explained by the distribution of earnings-related endowments. In fact, there is evidence that immigrants are better rewarded for their lower endowments. A possible explanation is that the Mexican-origin population is seen as homogeneous by employers, who therefore compensate individuals similarly, regardless of their respective endowments."     

The labor supply of male Hispanic immigrants in the United States

"Several recent studies have begun the systematic analysis of the labor market characteristics of Hispanics in the United States. This research has focused on two related issues: a) how the immigration and assimilation experience affects Hispanic earnings; and b) the measurement of wage differentials between Hispanics and non-Hispanics. The main findings of this research are that the earnings of (some) Hispanic immigrants rise rapidly after immigration; and that the wage differential between Hispanics and non-Hispanic whites is generally due to differences in observable skill characteristics. This article extends previous research by focusing on another labor market characteristic: the labor supply of Hispanic immigrants."     

Anti-Discrimination vs. Anti-Poverty? A Comparison of Pay Equity and Living Wage Reforms

SUMMARY

Welfare reform focuses attention on the potential of pay equity and living wage strategies to move women out of the ranks of the working poor. In this study, we use data from a large municipality in the Northeast to simulate implementation of the two policies and compare their relative effectiveness in raising the earnings of female- and minority-dominated jobs, narrowing gender- and race-based earnings differentials, and lifting workers out of poverty. Results show that pay equity raises salaries across-the-board, but especially among low-skilled and minority-dominated jobs, and closes the wage gap. Both pay equity and living wage dramatically reduce the incidence of poverty; living wage, however, leaves virtually untouched the type of discrimination targeted by pay equity and has little impact on the wage gap. The implications of these results for addressing the needs of women transitioning off public assistance and wage justice are discussed. We conclude that both policies should be an integral part of welfare reform efforts, as well as key planks in an overall wage justice strategy.     

The Native‐Immigrant Income Gap among the Self‐Employed in Sweden

During recent years we have observed that non‐western immigrants are overrepresented among the self‐employed in Sweden. A reason for this might be the difficulties faced by immigrants in the labour market. The unemployment rate among non‐western immigrants in Sweden is higher than among natives with similar human capital characteristics. While this is a well‐established result, we do not know much about how self‐employed immigrants perform economically compared to their native counterparts. The purpose of this paper is to describe and analyse the incomes of self‐employed immigrants and natives in Sweden. We will also discuss possible explanations for the income gap we find. We use Swedish register data for the period 1998 to 2002 and the population studied consists of individuals who have been continuously self‐employed during this period. By performing the analysis on this group of self‐employed we get a measure of the difference among the long‐term self‐employed. The outcome of interest is the average income over the period. Income regressions are estimated using both OLS and quantile regressions. We find that self‐employed immigrants receive significantly lower incomes than their native counterparts when controlling for individual characteristics, industry and start‐up year of the firm. The income gap is larger for non‐western immigrants than for western immigrants. Quantile regressions show that the native‐immigrant income gap is smaller at the top than at the bottom of the income distribution. Several possible explanations for the native‐immigrant income gap are discussed. One possible explanation is that immigrants have a lower reservation wage and accepts staying in business receiving a lower income than comparable natives. Another explanation might be that there is discrimination against self‐employed immigrants that will lead to lower incomes. There can be consumer discrimination or discrimination from banks and real estate owners.     

Earnings differentials of Mexican immigrants: The case of Turkey processing

This paper adopts a case study methodology to examine the determinants of earnings differentials between Mexican immigrant and domestic labor groups. A two stage structural model of earnings is developed which analyzes institutional processes involved in internal labor allocation and wage determination. The analysis points to the influence of social processes (surrounding the firm's internal wage structure) on the earnings of Mexican immigrants and domestic labor groups. In addition, the study suggests the possibility that captivity mechanisms may be present in allocating Mexican immigrants and local women to the lowest paid and most undesirable jobs within production. The presence of captivity mechanisms raises the possibility that the lower earnings of Mexican immigrants and women involves bias.     

Self-employed immigrants and their employees: evidence from Swedish employer-employee data

We present a study of the employees of self-employed immigrants with unincorporated firms in Sweden using matched employer-employee data from 2014. Non-European immigrants are more likely than natives to have employees in their firms. Furthermore, immigrants, especially non-European immigrants, are more likely than natives to employ immigrants in their firms, and non-European immigrants are most likely to employ recently arrived non-European immigrants with low education in their firms. Males are more likely than females to have employees in their firms, but self-employed females are more likely than self-employed males to have female employees. This is the case for all immigrant groups as well as for natives. We conclude that self-employed immigrants play a role in the labour market integration process since they create employment opportunities for immigrant groups that have difficulty entering the labour market.