The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?

The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike? This paper uses a state of the art three-stage estimation technique to identify the determinants of the self-employed immigrant and native men in Germany. Their making is surprisingly alike. Employing data from the German Socioeconomic Panel 2000 (GSOEP) release we find that self-employment is not significantly affected by exposure to Germany or by human capital. But this choice has a very strong intergenerational link and it is also related to homeownership and financial worries. While individuals are strongly pulled into self-employment if it offers higher earnings, immigrants are additionally pushed into self-employment when they feel discriminated. Married immigrants are more likely to go into self-employment, but less likely when they have young children. Immigrants with foreign passports living in ethnic households are more likely self-employed than native Germans. The earnings of self-employed men increase with exposure to Germany, hours worked and occupational prestige; they decrease with high regional unemployment to vacancies ratios. Everything else equal, the earnings of self-employed Germans are not much different from the earnings of the self-employed immigrants, including those who have become German citizens. However, immigrants suffer a strong earnings penalty if they feel discriminated against while they receive a premium if they are German educated. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?

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Publisher
Springer Journals
Copyright
Copyright © 2006 by Springer
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-005-3004-6
Publisher site
See Article on Publisher Site

Abstract

This paper uses a state of the art three-stage estimation technique to identify the determinants of the self-employed immigrant and native men in Germany. Their making is surprisingly alike. Employing data from the German Socioeconomic Panel 2000 (GSOEP) release we find that self-employment is not significantly affected by exposure to Germany or by human capital. But this choice has a very strong intergenerational link and it is also related to homeownership and financial worries. While individuals are strongly pulled into self-employment if it offers higher earnings, immigrants are additionally pushed into self-employment when they feel discriminated. Married immigrants are more likely to go into self-employment, but less likely when they have young children. Immigrants with foreign passports living in ethnic households are more likely self-employed than native Germans. The earnings of self-employed men increase with exposure to Germany, hours worked and occupational prestige; they decrease with high regional unemployment to vacancies ratios. Everything else equal, the earnings of self-employed Germans are not much different from the earnings of the self-employed immigrants, including those who have become German citizens. However, immigrants suffer a strong earnings penalty if they feel discriminated against while they receive a premium if they are German educated.

Journal

Small Business EconomicsSpringer Journals

Published: Mar 2, 2005

References

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