LAUSR

This paper uses individual-level panel data for all self-employed in the retail and service sectors to study how immigrant- and native-owned firms perform and contribute to job creation in Sweden. We use an individual fixed-effects model to explore how self-employment outcomes among immigrants and natives evolve with self-employment experience. The advantage of our approach is that it enables estimations of the returns to self-employment experience while controlling for unobservable time-constant individual factors. The results show that profits increase with self-employment experience and at a faster rate among immigrant men and women than for their native counterparts. Turnover and the likelihood of having employees both increase with experience and in a similar magnitude for immigrants and natives.