TY  - JOUR
AU  - Fairlie,Robert W.
AU  - Meyer,Bruce D.
TI  - The Effect of Immigration on Native Self-Employment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7561
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7561
L1  - http://www.nber.org/papers/w7561.pdf
N1  - Author contact info:
Robert Fairlie
Department of Economics
University of California, Santa Cruz
Santa Cruz, CA 95064
E-Mail: rfairlie@ucsc.edu

Bruce D. Meyer
Harris School of Public Policy
University of Chicago
1155 E. 60th Street
Chicago, IL 60637
Tel: 773/702-2712
Fax: 773/702-0926
E-Mail: bdmeyer@uchicago.edu
AB  - A rapidly growing literature examines the impact of immigrants on the labor market outcomes of native-born Americans.  However, the impact of immigration on natives in self-employment has not been examined, despite the over-representation of immigrants in that sector.   We first present a new general equilibrium model of self-employment and wage/salary work.  For a range of plausible parameter values, the model predicts small negative effects of immigration on native self-employment rates and earnings.  Using 1980 and 1990 Census microdata, we then examine the relationship between changes in immigration and native self-employment rates and earnings across 132 of the largest metropolitan areas in the United States.  We find evidence supporting the hypothesis that self-employed immigrants displace self-employed natives.  The effects are much larger than those predicted by simulations of the theoretical model.  Immigrants, however, do not have a negative effect on native self-employment earnings.  Our findings are similar if we weight immigration rates by the propensity of immigrant groups to be self-employed or if we try alternative estimation techniques and specifications.
ER  -