July 2000

IZA DP No. 175: Self-Employment and Earnings among High-Skilled Immigrants in the United States

published in: Cornelius, W. A. / Espenshade, T. J. (eds.), The International Migration of the Highly Skilled: Demand, Supply and Development Consequences, La Jolla, CA, 163-195

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 self-employment 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 self-employed 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.