Low-Skilled Immigrant Entrepreneurship

Magnus Lofstrom of the Public Policy Institute of California has an interesting new paper on low-skilled immigrant entrepreneurship

More than half of the foreign born workforce in the U.S. have no schooling beyond high school and about 20 percent of the low-skilled workforce are immigrants. More than 10 percent 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 compare annual earnings and earnings growth of immigrant entrepreneurs to immigrants in wage/salary employment as well as native born business owners. 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. An exception is immigrant men, who are found to have higher earnings growth than immigrants in wage/salary employment and are predicted to reach earnings parity after approximately 10 years in business. We also find that most of the 20 percent 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 those of self-employed native born women.

The chart below shows low-skilled self employment rates by gender and nativity in the United States.

 

Individual Attitudes towards Skilled Migration

A new paper by Anna Maria Mayda and Giovanni Facchini examines individual attitudes towards skilled immigrants.

It is commonly argued that skilled immigration benefits the destination country through several channels. Yet, only a small group of countries reports to have policies in place aimed at increasing the intake of skilled immigrants. Why? In this paper we analyze the factors that a direct measure of individual attitudes towards skilled migration, focusing on two main channels: the labor market and the welfare state. We find that more educated natives are less likely to favor skilled immigration - consistent with the labor-market channel – while richer people are more likely to do so – in accordance with the welfare state channel under the tax adjustment model. Our findings thus suggest that the labor market competition threat perceived by skilled natives in the host countries might be driving the observed cautious policies.

Why would more educate natives resist skilled immigration? They fear competition. They don’t want to be displaced.

Voting With Your Feet, Part III

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HT: Good Worldwide, LLC

They’ve All Come To Look For America

The illustration below shows the 20 countries from which the most people came to America in 2008:

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Every one of these immigrants submitted a vote of confidence for the United States. Their ballot was their feet.

HT: Simple Complexity

Do Immigrants Affect Wages?

The New York Times reports:

The estimated number of illegal immigrants in a state’s population shows no apparent correlation with the median wage for less educated workers in that state.

‘Why immigration is good for America’s business’

The Economist writes,

For all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 an average of 550,000 small businesses were created every month. One factor is a fairly open immigration policy. Vivek Wadhwa of Duke University notes that 52% of Silicon Valley start-ups were founded by immigrants, up from around a quarter ten years ago. But since 2001 the threat of terrorism and rising xenophobia has made immigration harder. Today more than 1m people are waiting to be granted legal status as permanent residents. Yet only 85,000 visas a year are allocated to the sort of skilled workers that might go on to found successful businesses of their own.