Earnings of Immigrants: Does Entrepreneurship Matter?

Abstract

The economic integration of immigrants has become a challenging topic in the European political agenda. This is especially true for countries that are struggling to survive the economic recession which started in 2008. In this context, entrepreneurship emerges as an alternative to unemployment. While the self-employment propensity of immigrants is well documented, little is known about the performance of these ventures. This article contributes to the literature by comparing and explaining the differential earnings of self-employed versus salaried immigrants in Spain. A binary logistic regression is applied to explore data collected by the Global Entrepreneurship Monitor project for 2005 and 2006. Our findings show that self-employed immigrants’ income exceeds that of salaried workers. Human capital and location-related environmental variables were found to be the best predictors of both self-employed and salaried immigrants’ earnings.