The impact of self-employment on the economic integration of immigrants: Evidence from Germany
Journal of Entrepreneurship, Management and Innovation
Traditi onal approaches in migrati on studies suggest that self-employment and entrepreneurial acti viti es enhance the perspecti ves of economic advancement of immigrants in host countries. Therefore, in many popular desti nati ons in Western Europe and Northern America, policies encouraging the self-employment of immigrants have been proposed. But does the self-employment contribute to the economic integrati on of immigrants? Is it a universal, one-way avenue that guarantees the successful
... s the successful inserti on of foreigners in a new socio-economic environment? Based on the German Socio-Economic Panel dataset, this study empirically investi gates the eff ect of self-employment on the economic integrati on of immigrants in one of the most important host countries in Europe. Our results demonstrate that the current self-employment status in Germany is associated with higher income in absolute and relati ve (self-assessment) terms. The immigrants with previous self-employment experience in Germany are less integrated than the average. This result indirectly shows that the business economy of immigrants is associated with a high risk of failure and not all self-employed individuals succeed in advancing in economic terms in a host country. Consequently, we argue that host countries should be more cauti ous in promoti ng entrepreneurship as the "perfect" and "universal" strategy that improves economic integrati on.