Immigrants' Propensity to Self‐Employment: Evidence from Canada

Despite the appeal of the “enclave thesis” and the “blocked mobility thesis,” there are other relevant factors that help to explain why some immigrants engage in self‐employment. Using the Longitudinal Immigration Data Base in Canada for 1980 to 1995, this study identifies characteristics of immigrants that yield a higher or lower propensity to self‐employment. Descriptive statistics show that immigrants often use self‐employment to supplement employment income and that the intensity and extensity of self‐employment vary among immigrant entry cohorts, depending on gender, the year of immigration, and duration of stay in Canada. A logistic model predicting self‐employment indicates that arrival in better economic years, longer residence in Canada, higher educational levels, older immigrants, and immigrants selected for human capital have higher odds of self‐employment. These findings suggest that even though immigrants may be attracted or driven to self‐employment, better‐equipped immigrants are more inclined to engage in self‐employment.