Immigrants’ self-employment over the local business cycle in Sweden

The study combines the large Swedish register data at individual level with the unemployment data at region level to investigate to what extent the entry into self-employment, particular among immigrants, are affected by the local business cycle. We show that local unemployment rate negatively affects the entry into self-employment among native men and immigrant men, except immigrants from Middle East. Moreover, such pull effect is weaker among non-European immigrants’ men. Furthermore, the result shows that Middle Eastern immigrants’ men are pushed into self-employment in economic downturns. Similar with men, our results show that the local unemployment rate also negatively affects women’s entry into self-employment except immigrants from Middle East. However, this negative effect is quantitatively much smaller than among men, indicating thebusiness cycle plays a less important role in determining women’s self-employment entry decision