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IZA
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What Makes an Entrepreneur and Does It Pay? Native Men, Turks, and Other Migrants in Germany
by
Amelie F. Constant, Yochanan Shachmurove, Klaus F. Zimmermann
(November 2003)
published in: International Migration, 2007, 45 (4), 69-98
Abstract:
This paper focuses on the entrepreneurial endeavors of immigrants and natives in Germany.
We pay closer attention to Turks, since they are the largest immigrant group with a strong
entrepreneurial tradition, and the self-employed Turks in Germany represent about 70% of all
Turkish entrepreneurs in the European Union. We identify the characteristics of the selfemployed
individuals and understand their underlying drive into self-employment. At the
same time we investigate how immigrant entrepreneurs fare in the labor market compared to
natives. Employing data from the German Socioeconomic Panel 2000 release we find that
the probability of self-employment increases significantly with age for all groups albeit at a
decreasing rate. Among immigrants, Turks are twice as likely to choose self-employment as
any other immigrant group. The age-earnings profiles of self-employed German and
immigrant men are concave and surprisingly similarly shaped. While for self-employed
German men hours of work and Treiman prestige scale scores increase their earnings, for
self-employed immigrant men it is the longevity of the business that makes a difference.
Everything else equal, the earnings of self-employed Turks are no different than the earnings
of the self-employed Greeks, Italians, Spaniards, ex-Yugoslavs, Polish or other East
Europeans, including those immigrants who have become German citizens.
Text: See Discussion Paper No. 940
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