Ana Damas de Matos (OECD), Yves Breem (OECD) and Anastasia Demidova (OECD)
International Migration Outlook 2024
International Migration Outlook
Abstract
This chapter provides an overview of migrant entrepreneurship in OECD countries since the mid‑2000s. It documents the increasing weight of migrants among entrepreneurs and their impact on innovation and job creation. The chapter examines whether entrepreneurship is a way for migrants to bypass difficulties in finding wage employment and how the emergence of digital platforms and new forms of work have changed migrant entrepreneurship. Finally, the chapter reviews policies in place across OECD countries to support migrant entrepreneurs.
Key findings
The public debate on the impact of migration on the labour market typically focusses on its impact on labour supply, that is the extent to which migrants compete for jobs with the native‑born. However, immigrants are not only competing workers; they are also employers.
In 2022, there were 10 million migrant entrepreneurs in the OECD. Immigrants accounted for 17% of the self-employed on average across OECD countries, up from 11% in 2006. The increase in the migrant population in the OECD explains 80% of the increasing share of migrants among entrepreneurs; while 20% was due to migrants being increasingly more likely to be self-employed.
In two‑thirds of OECD countries, immigrants are more likely to be self-employed than the native‑born. In 2022, 13.8% of the foreign-born employed population was self-employed compared with 13.4% of the native‑born, on average across 37 OECD countries. There are large differences across countries, however.
Immigrants are substantially more likely to be self-employed than the native‑born in Colombia (+7 percentage points), in Central and Eastern European countries (+5 percentage points), in Canada and the United States, as well as in Portugal and Spain (+3 to 4 percentage points). Conversely, immigrants are less likely to be self-employed in Japan and Korea (‑3 percentage points and ‑14 percentage points), Greece and Italy (‑5 to 6 percentage points), as well as Iceland (‑7 percentage points).
Job creation due to migrant entrepreneurship is significant. A simple calculation shows that, from 2011 to 2021, more than 3.9 million jobs were created through migrant self-employment in the 25 OECD countries with available data. This corresponds to 15% of the total employment growth in these years.
A working age migrant creates 0.2 jobs on average through self-employment. In some countries, migrants create significantly more jobs, such as in Colombia (0.7), Czechia (0.3) or the United States (0.4).
Migrant entrepreneurs create jobs in all sectors of activity but are over-represented among entrepreneurs in accommodation and food services and transport and storage in all OECD regions with available data.
Immigrant firms are similar to those of the native‑born in terms of innovation and R&D in countries with available data, such as Canada or the United States. Hence, immigrants tend to disproportionately contribute to innovation given their higher likelihood of being entrepreneurs.
Immigrant contribution to employment is hindered by the fact that most entrepreneurs, both foreign and native‑born, are own-account self-employed. Migrant entrepreneurs are more likely than native‑born to be own-account self-employed in two‑thirds of OECD countries, and this gap is neither explained by individual characteristics nor by the sector of activity.
Immigrant self-employment remains a way to bypass difficulties in finding wage employment. In two‑thirds of countries, newly self-employed immigrants are more likely to have been previously unemployed. Immigrants are also more likely to report having chosen self-employment due to difficulties in finding wage employment in OECD EU-EFTA countries.
Furthermore, immigrants are more likely to exit self-employment than the native‑born, and in particular more likely to exit to unemployment. In some countries, immigrants are over 50% more likely to exit self-employment than the native‑born, including Greece, Austria, Denmark, Switzerland and Portugal.
Immigrants are more likely than the native‑born to participate in the gig economy and in platform work, according to recent evidence for Canada and the United States. A policy concern stemming from these new forms of work, for native and foreign-born alike, is that workers are declared as self-employed although in many cases their work conditions resemble closely those of employees.
Only one‑third of migrant entrepreneurs in the OECD are women. This is a similar share than among native‑born entrepreneurs. In most countries, women migrant entrepreneurs are more likely than men to be own-account self-employed. Moreover, in the EU-EFTA, self-employed immigrant women are more likely to report they would prefer working as an employee. In some countries, this gap between immigrant and native‑born women is particularly large, such as in Belgium or Switzerland.
Almost all OECD countries have national programmes and initiatives to support migrant entrepreneurship. In contrast, few countries have services targeted at immigrants within their mainstream services to support entrepreneurship.
Programmes that support migrant entrepreneurs through the different stages of business creation, through training, mentoring, legal advice and access to financing have emerged as good practice and are in place in several OECD countries, such as Italy or Ireland.
In the last decade, following the main waves of humanitarian migration, OECD countries have put in place programmes to integrate humanitarian migrants through entrepreneurship. Examples include programmes targeted at Ukrainian women in Estonia and Venezuelan migrants in Colombia.
In the public debate on the economic impact of migration, OECD countries should not underestimate the potential of migrants as business owners and ensure that migrants have access to adequate support to fulfil that potential.
The discussion on the impact of migration on the labour market typically focusses on migration as an increase of labour supply. Migrants are additional workers who compete with the native‑born for jobs. However, many migrants also open their own businesses creating jobs for themselves and for others.
The positive impact of migration on job creation and innovation through entrepreneurship has attracted the attention of OECD countries in the last decade. In the context of the global race for talent, most OECD countries have introduced migration streams for entrepreneurs and migration programmes to attract start-ups and high potential entrepreneurs from overseas (OECD, 2022[1]; 2023[2]). However, migrant entrepreneurs arriving through these dedicated channels are only a small share of all migrant entrepreneurs in OECD countries.
Migrant entrepreneurship encompasses a wide range of realities, from own-account workers to founders of large high-tech companies. While migrants are over-represented among the founders of the most successful firms in the OECD, choosing self-employment as a way to bypass difficulties in integrating in the host country labour market remains a reality for many migrants, particularly among the most vulnerable groups. In the past one to two decades, the world of work has changed significantly – with increased digitalisation, the development of gig and platform work – further complexifying the realities of migrant entrepreneurship.
The aim of this chapter is to provide a comprehensive overview of migrant entrepreneurship across OECD countries in the last 16 years, from 2006, just before the financial crisis, to 2022, the recovery of the COVID‑19 pandemic.
The first part of the chapter presents an overview of migrant entrepreneurship in OECD countries and provides a profile of migrant entrepreneurs, relative to the native‑born. The second section covers the economic contribution of migrant entrepreneurship, in terms of innovation and employment. The third section looks at the evidence on immigrant self-employment as a way to integrate into the host country labour market. The last section reviews legal barriers to migrant entrepreneurship as well as policies to support migrant entrepreneurs across OECD countries.
What is a migrant entrepreneur?
There is not a unique definition of entrepreneurship. Instead, there is a range of definitions of what an entrepreneur is. Narrowly defined, entrepreneurs are the founders of innovative new businesses that grow rapidly in both employment and output and thus drive national measures of economic growth.1 However, more broadly defined, entrepreneurs are those “who start”, that is the founders of any business regardless of size or outcome (Goetz et al., 2015[3]).
Some studies on migrant entrepreneurship focus on firms and define migrant firms as firms with an immigrant founder. These studies tend to use firm level data to study migrant firm creation rates and outcomes of new migrant firms (survival, employment and revenue growth, innovation, etc.). However, survey or administrative data at the firm level only have information on the firm’s founders in a few cases. Recent research has matched several sources of administrative data to have more detailed information on firms’ founders, including their country of birth. Unfortunately, such data has been mobilised only in a few countries, namely in the United States and Canada, and is hence not suited to cross country comparisons. See Annex 4.A for more information on data sources on migrant entrepreneurship.
Most studies on entrepreneurship, and in particular on migrant entrepreneurship, identify entrepreneurs as the self-employed (Fairlie and Lofstrom, 2015[4]). Data availability partly drives this choice. Information on self-employment is widely available in individual and household surveys. This allows studying the characteristics of the self-employed, their position and outcomes in the labour market. Many individual and household surveys, such as labour force surveys, collect information on the country of birth, allowing to identify self-employed migrants.
The concept of self-employment aggregates together significantly different activities, which may be more or less entrepreneurial, in the colloquial sense. A small business owner, an own-account professional or artisan, a tech start-up founder or a platform worker may all be self-employed. Whether self-employment is a good proxy for entrepreneurship is open to debate. The two concepts do not fully overlap. On the one hand, some cases of self-employment would not be considered entrepreneurs. For example, a self-employed business owner may have bought or inherited the business and not have founded it. On the other hand, some entrepreneurs are not self-employed. This may be the case of founders of large businesses who are also the main manager or director of the firm, and as such are considered employees.
The development of affordable digital tools and platforms and the emergence of new forms of work has further blurred the concept and measurement of self-employment. Starting a business has been made less costly by digital tools and platforms that allow reaching potential clients in an unprecedented manner. This has led to a spur in small scale entrepreneurship, sometimes part-time and as a secondary activity. Although such activities are entrepreneurial in nature, they are not fully measured in standard data sources, such as household surveys.2
In addition, in the past decade, the emergence of digital platforms has led to the development of platform work,3 in which digital platforms (apps or websites) facilitate the match between worker and client, irrespective of whether the work is digital or not. While for some workers, platform work is irregular, referred to as gig work,4 and often not captured in usual surveys (Hardy, 2024[5]; Bracha and Burke, 2021[6]) for others, it is their main source of income. In these cases, workers will generally be considered self-employed, although in many cases their work conditions resemble closely those of employees. This has renewed concerns for policy makers over false self-employment.5
Measuring early stage entrepreneurship, entrepreneurship as secondary activity, and false self-employment associated with platform work are active areas of research. This will prove important also in better measuring, and hence understanding, migrant entrepreneurship given that recent evidence for some OECD countries shows that immigrants are more likely to participate in the gig economy and platform work (Picot and Ostrovsky, 2021[7]; Atkins, Brummet and Johnson, 2023[8]).
Most of the empirical analysis in this chapter is based on labour force surveys (LFS) of OECD countries and focuses on individuals who are self-employed as their main activity.6 The LFS data offer several advantages. All OECD countries included use a common definition of self-employment as defined by the International Labour Organization.7 The data allow identifying migrants and provide detailed information on the individuals’ demographic characteristic as well as their labour market situation, in a comparable way across countries. To address the heterogeneity among the self-employed, the analysis also looks at different types of self-employment with and without employees, or incorporated and unincorporated. Furthermore, the analysis is complemented with recent literature on immigrant entrepreneurship in OECD countries based on alternative data sets and concepts.
Immigrants account for 17% of entrepreneurs in 2022 in OECD countries on average, up from 11% in 2006
In 2022, immigrants represented 16.6% of the self-employed population on average across OECD countries (Figure 4.1), whereas they accounted for 15.7% of the employed population. Immigrants are over-represented among the self-employed in 25 out of 36 OECD countries, relative to their share of the employed population (Annex Figure 4.B.1).
Share of immigrants among the self-employed, 2006 and 2022, percentage
Note: Data for the United Kingdom is for 2019 instead of 2022.
Source: EU Labour Force Survey (EU-LFS) 2006, 2019 and 2022; United States, Current Population Survey – Annual Social and Economic Supplement (CPS ASEC) 2006 and 2022; Australia, Characteristics of Employment 2014 and 2022; Chile, Encuesta de Caracterización SocioEconómica Nacional (CASEN) 2009 and 2022; Colombia, Gran Encuesta Integrada de Hogares (GEIH) 2022; Costa Rica, Encuesta Continua de Empleo (ECE) 2011 and 2022; Mexico, Encuesta Nacional de Ocupación y Empleo (ENOE) 2006 and 2022; Canada, Labour Force Survey (Canada LFS) 2006 and 2022; New Zealand, Labour Force Survey (New Zealand LFS) 2021; Japan, Census 2020; Korea, Immigrant’s Living Conditions and Labour Force (SILCLF) 2021 & Economically Active Population Survey (EAPS) 2021.
Unsurprisingly, a large part (87%) of the cross-country differences in the share of foreign-born among the self-employed reflects the differences across countries in the share of immigrants among the employed population. The other part (13%) is driven by cross-country differences in the relative (foreign-born/native‑born) likelihood of being self-employed. If immigrants in all countries had the same self-employment rate, and similarly all native‑born across countries had the same self-employment rate, the variance in the share of the foreign-born among the self-employed would be 87% of the actual observed cross-country variance.
From 2006 to 2022, the share of immigrants among OECD entrepreneurs increased in virtually all countries. This was mainly due to the increase in the share of immigrants in the employed population. The share of immigrants in the employed population increased from 11% in 2006 to 16% in 2022, on average across the 27 OECD countries for which there are data in both years, accounting for five out of the 6 percentage point average increase in the share of immigrants among the self-employed.8
The increase in the immigrant self-employed population is large in absolute numbers. From 2006 to 2022, the number of self-employed immigrants increased by 50% or more in 20 countries and doubled or more in 13 countries (Annex Table 4.B.1). In 2022, there are an estimated 10 million self-employed immigrants in the OECD.
Immigrants are more likely to be self-employed than the native‑born in two‑thirds of OECD countries
In 2022, 13.8% of the foreign-born employed population was self-employed compared with 13.4% of the native‑born, on average across 37 OECD countries (Table 4.1). Although the difference is on average small, there is substantial heterogeneity across countries. In 17 out of 37 countries, the absolute difference in self-employment rates between foreign and native‑born is 2 percentage points and over.
Self-employment rate, 2022, percentage
Source: EU-LFS 2022; United Kingdom, Labour Force Survey (UK LFS) 2021; CPS ASEC 2022; Australia, Characteristics of Employment 2022; CASEN 2022; GEIH 2022; ECE 2022; ENOE 2022; Canada LFS 2022; New Zealand LFS 2021; Israel, Labour Force Survey (Israel LFS) 2020; Japan, Census 2020; SILCLF 2021 & EAPS 2021.
In approximately two‑thirds of OECD countries, the self-employment rate is larger for the foreign-born than the native‑born. The largest differences are in Colombia (+7 percentage points), in several Central and Eastern European countries – Czechia, Hungary, the Slovak Republic – (+5 percentage points) as well as Spain, and the United States (+3 to 4 percentage points). In Colombia, the self-employment rate of immigrants was 45%, the highest in the OECD, and 7 percentage points higher than that of the native‑born. This high self-employment rate of immigrants is due to the high self-employment rate of Venezuelans in Colombia since Venezuelans represent approximately 90% of immigrants in Colombia. In other OECD Latin American countries, the self-employment rates of the foreign-born are on average high but similar to those of the native‑born.
Conversely, immigrants are significantly less likely to be self-employed than the native‑born in Japan and Korea, Greece and Italy as well as Iceland.9 In Japan and Korea, the self-employment rate of immigrants is among the lowest in the OECD at approximately 5%. The gap relative to the native‑born is particularly large in Korea where the self-employment rate of the native‑born is high (18.7%). In Iceland, the self-employment rate of immigrants is similarly low. Iceland is a new destination country, mainly for employed labour migrants. In Greece and Italy, the self-employment rate of immigrants is higher (16.4% and 13.7%) but these are countries where the self-employment rate of the native‑born is relatively high (21% and 19.8%).
From 2006 to 2022, the self-employment rates of the overall employed population have declined in Australia, the EU-EFTA and the United States (Figure 4.2). This trend has been documented in the literature on self-employment.10 In the United States, the rate of business creation remained low throughout the 2010s until the COVID‑19 pandemic (Decker and Haltiwanger, 2023[9]). In the EU, the decline has been shown to have been driven by an imbalance between labour market exits among older self-employed male workers and relatively low creation of new self-employment (European Commission, 2015[10]). In contrast in the United Kingdom, self-employment increased after the 2008/09 financial crisis until 2019. It then decreased sharply with the COVID‑19 pandemic, driven by people flowing out of self-employment to become employees.11
The evolution of the self-employment rate of the foreign-born relative to that of the native‑born differed across countries. While the gap in self-employment between foreign and native‑born decreased slightly in Australia and in the EU-EFTA, it increased in the United States.
Note: For the United Kingdom, data for the period 2006‑18 is taken from the EU LFS, and for the period 2019‑22 from the UK LFS.
Source: EU-LFS 2006-22; UK LFS 2019-22; CPS ASEC 2006-22; Australia, Characteristics of Employment 2014-22.
Individual characteristics do not explain the differences in self-employment rates between foreign- and native‑born
Immigrants are more likely to be self-employed than the native‑born in most OECD countries (Table 4.1). To establish to which extent these differences are driven by differences in characteristics between the two groups, Table 4.2 presents the result of an Oaxaca decomposition of the self-employment rate. The difference in the self-employment rate between foreign and native‑born is decomposed into an “explained” part that is due to differences in characteristics between the two populations (age, gender, education and household composition) and an “unexplained” part that is due to differences in the likelihood to be self-employed holding characteristics fixed.
In the five countries considered, the foreign-born are more likely to be self-employed than the native‑born. The differences range from 3.6 percentage points in the United States to 0.4 percentage points in Germany.
Differences in characteristics (age, gender, education and household composition) (the term “Explained” in Table 4.2) account for 1.4 percentage points (that is 39%=1.4/3.6) of the observed difference in self-employment (3.6 percentage points) between the two groups in the United States and for 0.4 percentage points (that is 21%=0.4/1.9) in France.
In the other countries, differences in composition do not explain the higher self-employment rate of immigrants at all, as in the United Kingdom, and even attenuate differences between native and foreign-born propensities to self-employment, as in Germany and Spain.
Decomposition of the difference in self-employment rate between foreign- and native‑born
Note: Oaxaca decomposition based on linear probability models of the self-employment rate. Control variables are year fixed effects, age, gender, education, number of children in household. Data for the United Kingdom is for 2018‑19.
Source: EU-LFS 2018‑19 and 2021‑22; CPS ASEC 2021‑22.
Which immigrants are most likely to be self-employed?
In OECD EU-EFTA countries, the self-employment rate of non-EU migrants is slightly lower than that of EU migrants
In OECD EU-EFTA countries, 65% of self-employed immigrants were born in a third country. The cross-country differences broadly reflect the differences in country of origin composition of host countries’ migrant populations (Annex Figure 4.B.2).
Immigrants born in other EU-EFTA countries benefit from free mobility and face fewer barriers to entrepreneurship for several reasons, such as unrestricted access to the labour market and potentially easier access to financing. At the same time, free movement migrants are less likely to be pushed into self-employment given that they face fewer difficulties integrating into wage employment.
In OECD EU-EFTA countries, the self-employment rate of non-EU migrants (11.6) was marginally lower than the self-employment rates of both EU migrants (11.9) and the native‑born (12.0) (Table 4.3). The self-employment rates of EU relative to non-EU migrants were particularly large in Greece, Portugal and Spain, as well as in Belgium and France. The self-employment rate of non-EU migrants is particularly large in Czechia and Hungary relative to the native‑born.
Self-employment rates, 2022, percentage
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022.
Immigrant women are less likely to be self-employed than immigrant men
Both foreign- and native‑born women are under-represented among the self-employed. Women account for 35% of self-employed immigrants on average across OECD countries, and 36% of the self-employed native‑born (Annex Figure 4.B.3). There is a larger variation across countries in the share of women among entrepreneurs for the foreign- than the native‑born population.
The self-employment rate of immigrant women is lower than that of immigrant men in all countries, except Lithuania. This is also the case among the native‑born: native‑born women are less likely to be self-employed than native‑born men in all countries. The self-employment rate of immigrant women was at 9% in 2022 on average across OECD countries, 6 percentage points lower than the rate for immigrant men (Table 4.4).
The difference in the self-employment rates between immigrant and native‑born women are more modest in comparison, 0.9 percentage point on average across countries. The difference between the self-employment rate of foreign- and native‑born (in absolute terms) are larger among men than among women.
In countries where immigrants are more likely to be self-employed than the native‑born, this tends to be true both for men and women. In Canada, Colombia, Czechia, Hungary, Portugal, Spain, the United Kingdom, the United States, both immigrant men and women are more likely to be self-employed than the native‑born of the same gender. The differences are larger in most cases for men. Exceptions are Colombia and Portugal, where the self-employment foreign/native‑born gap is larger for women than men.
Similarly, in countries where immigrants are the least likely to be self-employed relative to the native‑born, this is the case both for men and women, although the differences tend to be larger again for men. This is the case in Greece, Italy and Iceland.
Self-employment rates, 2022, percentage
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; CASEN 2022; GEIH 2022; ECE 2022; Australia, Characteristics of Employment, 2022; Canada LFS 2022.
The self-employment rate of the foreign-born is larger than that of the native‑born at all education levels
Tertiary educated individuals, both foreign and native‑born, are overrepresented among the self-employed. In 2022, 43% of the foreign-born self-employed were tertiary educated, on average across OECD countries, and 42% of their native‑born counterparts (Annex Figure 4.B.4). Highly educated individuals, both foreign and native‑born, are over-represented among the self-employed in almost all countries (Annex Figure 4.B.5).
In OECD EU-EFTA countries and in Australia, the self-employment rate of immigrants is similar to that of the native‑born at each education level (Figure 4.3). In the other OECD regions (Canada, OECD LAC countries, the United Kingdom and the United States), the self-employment rate of the foreign-born is larger than that of the native‑born at all education levels.
It is at the lowest education level, that the self-employment rate of immigrants is largest relative to that of the native‑born, which is consistent with immigrants being more likely to be pushed into self-employment. In Canada, low educated immigrants account for only 5% of all employed immigrants. However, their self-employment rate is high (16.3%) compared with that of the native‑born (9%). Similarly, in the United Kingdom, the self-employment rate of low educated immigrants is 21.6% compared with 15.4% for the native‑born. In OECD LAC countries, the self-employment rate is highest for the low educated population, and more so for the foreign-born (40.9% and 34.5%).
Highly educated immigrants are as likely to be self-employed as the native‑born, or even marginally more likely, such as in Canada and the United States. In Canada, 13.4% of high-educated immigrants are self-employed, compared with 11.5% of the native‑born; and 10.4% in the United States compared with 8.4% of the native‑born. Businesses created by the highly educated have been shown to be more likely to be high value firm creation.
Self-employment rate of the foreign- and native-born by education group, 2022
Note: Left-axis: weight of each group among the employed population (%). Right-axis: self-employment rate (%). The self-employment rate of the foreign-born (or native-born) is the weighted average of the self-employment rate by education level (the diamonds), where the weights are the percentage of the employed population in each education group (the bars). Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; CASEN 2022; GEIH 2022; ECE 2022; ENOE 2022; Canada LFS 2022.
Most migrant entrepreneurs migrated for reasons other than work
Most self-employed immigrants did not move to the host country for work reasons in OECD EU-EFTA countries (Figure 4.4). Across OECD EU-EFTA countries, 39% of immigrant entrepreneurs moved to their host country for family reasons, while 32% did so for employment reasons. A small proportion of immigrant entrepreneurs also migrated to study (7%) and only 6% arrived for humanitarian reasons. This distribution is similar to that of the total employed immigrant population in OECD EU-EFTA countries. In the same period, 44% of employed immigrants moved to the host country for family reasons, 32% for work reasons, 8% for humanitarian reasons and 7% for studying.
Migration channels specific for entrepreneurs play a limited role in immigrant entrepreneurship. Australia is one of the few countries that publishes detailed entry visa data for its permanent immigrant population. Among those who ran a business in 2016 in Australia, only 6% came on an entrepreneur/investor or business visa. The vast majority (57%) of immigrant entrepreneurs in Australia originally migrated on a work visa. Labour migration is the main reason for immigration to Australia, in contrast to OECD European countries. Family migrants also represent 31.5% of immigrant entrepreneurs in 2016, while beneficiaries of international protection represent only 5.6%. The Australian case confirms the importance of family migration in immigrant entrepreneurship.
Reason for, or category of, migration of self-employed migrants, 2016 (Australia) and 2021 (EU-EFTA), percentage
Note: The EU-EFTA average excludes Iceland, as no EU-LFS data is available for Iceland for 2021.
Source: EU-LFS 2021; Australian Census and Migrants Integrated Dataset (ACMID) 2016.
Immigrants are over-represented among own-account workers and unincorporated self-employed
In all OECD countries, most self-employed have no employees. For the native‑born, the share varies substantially from 50% to close to 90%. In over three‑quarters of the countries, immigrants are more likely than the native‑born to be self-employed without employees (Figure 4.5). Furthermore, women, both native and foreign-born, are on average 12 percentage points more likely to be own-account self-employed than men.
The share of self-employed without employees has increased in the past 15 years for foreign- and native‑born, both for men and women, in OECD EU-EFTA countries as well as the United Kingdom (Figure 4.6). This was also the case in Canada where the share of self-employed migrants without employees increased from 65.7% in 2006 to 73.7% in 2022, and that of the native‑born increased from 64.9% to 71.4%.
Share of own-account self-employed, 2022, percentage
Note: The share is the number of self-employed without employees divided by the total number of self-employed. Data for the USA is for 2014 19 from Lee et al. (2023[11]) based on CPS Outgoing Rotation Groups. Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; Australia, Work-Related Training and Adult Learning 2020 21; CASEN 2022; GEIH 2022; ECE 2022; Canada LFS 2022; SILCLF 2021 & EAPS 2021; New Zealand LFS 2021.
Share of own-account self-employed, 2008‑22, percentage
Note: For the United Kingdom, data for the period 2008‑18 is taken from the EU LFS, and for the period 2019‑22 from the UK LFS.
Source: EU-LFS 2008-22; UK LFS 2019-22.
To understand whether the differences in the self-employment rate between foreign- and native‑born (presented in Table 4.1) are driven by self-employment with or without employees, Table 4.5 provides a decomposition of the self-employment rate. The self-employment rate equals the share of the employed population that is own-account self-employed, i.e. without employees, plus the share of the employed population that is employer self-employed, i.e. with employees. This distinction speaks, at least indirectly, to the drivers of self-employment. The self-employed without employees are more likely to be self-employed by “necessity”, and the self-employed with employees represent a higher value‑added job creation (see also sections The economic contribution of immigrant entrepreneurship in OECD countries and immigrant self-employment: A strategy to integrate into the labour market?).
Immigrants are more likely to be self-employed without employees than the native‑born but less likely to be self-employed with employees in most countries (Table 4.5). In Germany or the Netherlands, the self-employment rate of immigrants is larger than that of the native‑born, and the difference is due to immigrants being more likely to be self-employed without employees. In these countries, immigrants are less likely than the native‑born to be self-employed with employees. In contrast, in Columbia, Czechia, Hungary or the United Kingdom, immigrants are more likely to be self-employed, both with and without employees, than the native‑born. This finding holds controlling for individual characteristics as well as sector of activity (see section on The economic contribution of immigrant entrepreneurship in OECD countries).
Self-employment rate, with and without employees, 2022, percentage
Note: The self-employment rate equals the self-employment rate without employees plus the self-employment rate with employees. The total foreign-born/native‑born gap is the gap in the self-employment rate reported also in Table 4.1. Data for the United Kingdom is for 2019, therefore the sum of the self-employment rates with and without employees does not equal the self-employment rate in Table 4.1
Source: EU-LFS 2019 and 2022; Canada LFS 2022; Australia, Work-Related Training and Adult Learning 2020‑21.
Another distinction among the self-employed population is whether the business of the self-employed is incorporated, or unincorporated. An incorporated business is its own separate legal entity which means limited legal and financial liability of the business owner. Incorporated self-employment may be a better proxy for higher value‑added entrepreneurship than self-employment (Levine and Rubinstein, 2016[12]). This second distinction is only available in the data for Australia, Canada, the United States and the LAC countries. In Australia, the share of unincorporated self-employed migrants among all employed migrants is similar to that of the native‑born (8.8% in 2020/21). In Canada, the United States, as well as Chile and Costa Rica, the share of unincorporated self-employed is larger among immigrants than the native‑born.12
Immigrants account for a large share of the self-employed in some sectors
Migrant entrepreneurs work in a wide range of sectors (Table 4.6). In OECD EU-EFTA countries, the top three sectors in which migrant entrepreneurs have their businesses are wholesale and retail trade (16%), construction (16%), and accommodation and food services (12%). Native‑born entrepreneurs are more likely to work in professional, scientific and technical activities (16% compared with 10% for immigrants), and less likely to work in construction (14%) relative to the foreign-born.
Distribution of self-employed across sectors, 2022, percentage
Note: For Canada, the Administrative and support services sector is suppressed for reasons of confidentiality. Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; Australia, Characteristics of Employment 2022; CASEN 2022; GEIH 2022; ECE 2022; ENOE 2022; Canada LFS 2022.
In Australia, Canada, OECD Latin American countries, the United Kingdom and the United States, migrant entrepreneurs are similarly over-represented in the Accommodation and food services. In contrast with other host countries, in Australia and in the United Kingdom, a more similar share of immigrant and native‑born entrepreneurs work in Professional, scientific and technical activities.
Among women entrepreneurs, the distribution across sectors differs. Almost no self-employed women work in construction, nor in transportation and storage. However, self-employed immigrant women are also over-represented relative to native‑born women in Accommodation and food services (12.6% compared with 6.4% in EU-EFTA OECD countries) as well as other services (16.4% compared with 13.9% in EU-EFTA OECD countries).
Immigrants account for a large share of all self-employed in a few sectors of activity (Annex Table 4.B.2). Over one‑quarter of all self-employed in accommodation and food services in the EU-EFTA are immigrants, as well as over one‑third in the United States and over half in Australia and Canada. Similarly, immigrants account for 21% of all self-employed in the transport and storage sector in the EU-EFTA, 42% in the United States, 57% in Australia and 68% in Canada. The share of immigrants among entrepreneurs in these sectors are well above the share of immigrants in the self-employed population.
Immigrants play an outsized role as founders of some of the most innovative firms in the OECD
There is evidence that immigrant entrepreneurs are over-represented among founders of some of the most innovative and successful firms in the OECD. In the United States, in 2022, the four most valuable private venture backed companies had immigrant founders as well as three of the ten most valuable public companies globally, founded in the United States (Chodavadia et al., 2024[13]). Immigrants have also been shown to be over-represented among founders of firms in the 2017 Fortune 500 ranking, the largest firms in the United States (Azoulay et al., 2022[14]), and among founders of unicorn firms, that is privately owned firms valued at USD 1 billion or more, in the United States (Anderson, 2022[15]) and Germany (Startup Verband, 2023[16]). Immigrants are also over-represented among founders in Silicon Valley’s technology businesses (Saxenian, 2002[17]), among founders of engineering and technology companies, and more recently among top AI firms in the United States (Anderson, 2023[18]).
The contribution of immigrants to innovation is more similar to that of the native‑born when considering all firms in the economy
The over-representation of immigrant founders among the most successful and innovative companies attracts a lot of attention in the media and public opinion given the disproportionate role of these firms in terms of revenue and employment. However, these are exceptional firms, and it is not straightforward to generalise the role of immigrant entrepreneurs in these firms to a more representative population of firms in the economy.
A systematic evaluation of the contribution of immigrant entrepreneurs to innovation across OECD countries is limited by data availability. Ideally, one would need data on measures of innovation at the firm level linked to the characteristics of the founder of the firm. In the absence of such data, this section first compares the prevalence of immigrant and native‑born entrepreneurs in sectors of activity associated with innovation, and then complements these results with a review of recent country-specific evidence on the role of migrant entrepreneurs in innovation.
Whether firms created by immigrants contribute to increased innovation in the host country partly depends on the level of research and development (R&D) occurring in immigrant firms. A first approximation of R&D activity of entrepreneurs is the sector of activity they operate in. The OECD Taxonomy of Economic Activities Based on R&D Intensity classifies sectors in five groups (from lowest to highest) according to their level of R&D intensity, which is estimated as the ratio of R&D to value added within the sector (Galindo-Rueda and Verger, 2016[19]).13
Only a small share of self-employed individuals (5%) carry out their activities in high and medium-high R&D intensity sectors (the two highest levels of the OECD taxonomy).14 Immigrants are slightly more likely than the native‑born to be self-employed in high R&D intensity sectors on average across the 14 OECD countries considered in this estimation (5.6% compared with 5.2%) (Figure 4.7). In Austria, Czechia and Switzerland, the foreign-born self-employed are the most likely to work in high R&D intensity sectors (7% to 10%). In the United States, the share of self-employed working in high R&D sectors is lower for the foreign than the native‑born (5.2% compared with 6.3%). However, immigrants are more likely to be self-employed than the native‑born. The share of self-employed in high-R&D among the total employed population in the United States is the same for immigrants and the native‑born (1.2% and 1.1%).
This estimation includes all self-employed individuals including the unincorporated self-employed, often with no employees, who are less likely to work in sectors with high levels of R&D and innovation.15 Restricting only to the self-employed with incorporated firms, the share of self-employed working in high and medium-high R&D sectors increases to 7% both for the native‑born (7%) and foreign-born (7.3%) in the United States.16 For Canada, Picot and Ostrovsky (2021[20]) show that incorporated immigrant entrepreneurs are more likely than Canadian-born to work in high and medium-high intensity R&D sectors according to the same OECD Taxonomy in 2016. Ten percent of the foreign-born entrepreneurs work in these sectors, compared with 6.4% of the adult children of immigrants and 5.3% of the population with no immigrant parent or grandparent.
Share of self-employed working in high and medium-high intensity R&D sectors, 2021-22, percentage
Note: Share of self-employed individuals whose activities are in high and medium-high intensity industries following the OECD taxonomy in Galindo-Rueda and Verger (2016[19]). Data for the United Kingdom is for 2018‑19.
Source: EU-LFS 2018‑19 and 2021-22; CPS ASEC 2021-22; Australia, Education and Work 2021-22.
Recent research on migrant entrepreneurship in some OECD countries has mobilised detailed firm-level data to study innovation and investment in R&D in immigrant and native‑born owned firms. Overall, immigrant firms are similar to those of the native‑born in terms of innovation and R&D. In Canada, Germany and the United States, immigrant firms perform at least as well if not better than firms of the native‑born.
In the United States, firms with at least one immigrant owner are on average more innovative along most of the innovation measures considered, including reported firms’ innovation activities, research and development, trademarks, and patents (Brown et al., 2019[21]; Lee et al., 2023[11]; Chodavadia et al., 2024[13]).17 Previous research based on a survey of 1 300 high-tech companies, found little difference between firms with and without immigrant founders (Hart and Acs, 2011[22]).
Similarly, for Canada, Ostrovsky and Picot (2020[23]) compare innovation of immigrant and native‑born owned SMEs,18 and find little difference between the two groups. In immigrant owned firms, there was marginally more product and process innovation, but there was no difference in the use of intellectual property.
The contribution to employment of migrant entrepreneurship is sizeable
By being self-employed, immigrants create their own job as well as potentially other jobs as their activity expands. A preliminary key fact to keep in mind before turning to the comparison of the contribution to employment of migrant and native‑born entrepreneurs is that most self-employed, both foreign and native‑born, have no employees (as shown earlier in this chapter – see section on the scope of migrant entrepreneurship in OECD countries). Furthermore, only a small share of the self-employed, native and foreign-born, have ten employees and over (Figure 4.8).
Distribution of the self-employed according to number of employees, 2021-22, percentages
Note: Data for the United States is for 2022-23 because the firm size variable indicates how many employees worked for the respondent during the preceding calendar year. Data for the United Kingdom is for 2018‑19. Size categories are different for CHL (no employee, 1-8 employees, 9+ employees), COL (no employee, 1-9 employees, 10-18 employees, 19+ employees), CRI (no employee, 1-8 employees, 9-18 employees, 19+ employees), USA (1-9 employees, 10-24 employees, 25+ employees) and EU-LFS 2017-19 (no employee, 1-10 employees, 11-19 employees, 20+ employees).
Source: EU-LFS 2018‑19 and 2021-22 (except for DNK, IRL, ISL, SVN, PRT, 2017-19); CPS ASEC 2022-23; Australia, Work-Related Training and Adult Learning 2020-21; CASEN 2022; GEIH 2022; ECE 2022.
A working age migrant creates 0.2 jobs through self-employment on average across 27 OECD countries
The number of jobs created through self-employment of immigrants depends on different margins. First, it depends on the likelihood of immigrants to be self-employed. Second, it depends on how many jobs the self-employed create. This in turn depends on the share of the self-employed that actually hire employees and on how many these hire. Table 4.7 presents a lower bound estimation of the number of jobs created per immigrant in the working age population (column A) and decomposes it in these different margins.19 See Annex 4.A for details on the estimation.
For each immigrant in the working age population 0.20 jobs are attributed to immigrant self-employment on average across the 27 countries in the analysis (column A). The estimation is almost identical for the native‑born at 0.21 jobs per working age individual (Annex Table 4.B.4). There are however differences across countries.
In a majority of countries, there are fewer jobs created through migrant than native‑born self-employment (column A). This is because, in many countries – such as Australia, Austria, Belgium, Germany, Ireland, Italy, the Netherlands, Sweden – migrants are less likely to be self-employed than the native‑born, self-employed migrants are less likely to have employees, and when they do they have fewer of them. But even in countries in which migrants are more likely to be self-employed than the native‑born (column B), they are more likely to have no employees (column C1) or have fewer employees (column C2). This is for example the case of Finland, France or Spain.
Some exceptions are Columbia, Czechia, Hungary, Luxembourg, Portugal, the United Kingdom and the United States. In these countries, there are more jobs created by immigrant self-employment because immigrants are more likely than the native‑born to be self-employed (column B). Among the self-employed, immigrants are more likely to have employees in Colombia, Czechia, Hungary and the United Kingdom, but not in Luxembourg, Portugal, nor the United States. The average number of employees per employer is lower for immigrants than native‑born, with the exception of Czechia (column C2).
These findings are in line with the rich recent literature for the United States on the contribution of immigrant entrepreneurs to employment, based on various data sources both at the individual and firm level. The emerging story from this literature is that immigrants contribute disproportionately to employment creation. This is driven by their higher propensity to be entrepreneurs. While there is evidence that self-employed immigrants are less likely than the native‑born to be employers (Lee et al., 2023[11]) and that immigrant firms are on average smaller than native‑born firms (Pekkala Kerr and Kerr, 2020[24]; Lee et al., 2023[11]), immigrant entrepreneurs still have an outsized contribution to employment creation because they are more likely to create firms at any given firm size (Azoulay et al., 2022[14]).
For Canada, research using administrative linked employer employee data shows that while immigrants are more likely to be self-employed than the native‑born, they are similarly likely to be entrepreneurial in terms of opening incorporated firms with employees (Green et al., 2023[25]).
Job creation through migrant entrepreneurship is particularly large in Colombia, relative to other countries but similar to that of the native‑born population. Migrant entrepreneurship is Venezuelan entrepreneurship given that over 90% of migrants in Colombia are displaced Venezuelans. The high job creation of Venezuelan migrants is in line with recent evidence for Colombia. A survey of approximately 11 000 entrepreneurs targeting Venezuelan migrants and returning Colombians showed in December 2023 that 59% of migrant businesses created at least one additional job and 39% created two or more additional jobs.20
Number of jobs created through self-employment per immigrant in the working age population, 2021‑22
Note: A=B*C=B*[(1‑C1)+C1*C2], For the United States it is not possible to distinguish between self-employed with and without employees using CPS data. Therefore, the number of incorporated companies is used as a proxy for the number of self-employed that have employees for columns C1 and C2. Data for the United Kingdom is for 2018‑19. See Annex 4.A.
Source: EU-LFS 2018‑19 and 2021‑22 (except for DNK, IRL, ISL, SVN, PRT, 2017‑19); CPS ASEC 2022‑23; Australia, Work-Related Training and Adult Learning 2020‑21; CASEN 2022; GEIH 2022; ECE 2022.
Self-employed migrants are less likely to have employees, and have fewer of them when they do
The evidence presented earlier in this chapter shows that self-employed foreign and native‑born work in different industries, and firm size differs across industries. Firms are on average larger in manufacturing than in retail trade, for example.
However, the differences in the likelihood of being an own-account worker or in firm size between foreign and native‑born are not driven by differences in the sector of activity. In EU-EFTA countries, immigrants are on average 5 percentage points less likely to have employees than the native‑born. Controlling for sector of activity does not explain this gap (the gap controlling for industry increases to 7 percentage points for EU-EFTA countries) (Annex Table 4.B.5). The higher propensity of immigrant self-employed to have employees in Hungary, Lithuania and Slovenia is also not driven by the sectors they work in.
Similarly, among self-employed employers, immigrants are 5.4 percentage points less likely to have 10 or more employees in EU-EFTA countries. This pattern is observable for all EU-EFTA countries except Hungary, where foreign-born entrepreneurs are more likely to have 10 or more employees than the native‑born. The difference between foreign and native‑born entrepreneurs is not driven by the sectors of activity they work in.
Furthermore, socio demographic characteristics do not fully explain the differences between foreign and native‑born self-employed in the likelihood of being employers or having 10 and more employees. While men and more educated self-employed are more likely to be both employers and having more employees, differences in the composition of the foreign- and native‑born populations do not explain the lower likelihoods of immigrants.
There is a variety of reasons that motivate individuals to start their own businesses. These may be pull factors (such as an idea for a new business or the willingness to have more freedom in working hours) or push factors such as difficulties in finding paid employment and integrating into the labour market. These two broad reasons to select into self-employment are referred to in the literature as opportunity vs. necessity entrepreneurship (Fairlie and Fossen, 2020[26]).
Disentangling these two motivations to start a business is important in the context of understanding immigrant entrepreneurship. A concern is that immigrants have poorer labour market outcomes than the native‑born in most OECD countries (OECD/European Commission, 2023[27]) and this may lead them to choose self-employment as a way to bypass difficulties in the host country labour market.
There is no perfect way to empirically distinguish opportunity and necessity entrepreneurship, especially in a cross-country setting (Box 4.1). This section first presents recent evidence from OECD countries, based on different measures, on self-employment as necessity entrepreneurship. Conversely, there is also evidence that immigrants face barriers to entering into self-employment.
This box presents four measures used in the literature to distinguish two main types of entrepreneurship. These are often referred to as necessity vs. opportunity, or choice vs. necessity, or subsistence self-employment vs. entrepreneurship with growth potential.
The Global Entrepreneurship Monitor (GEM) directly asks respondents about their motivations to start a business. A question in the GEM survey asks directly: “Are you involved in this start-up to take advantage of a business opportunity or because you have no better choices for work?” However, the GEM does not allow to identify immigrants as it does not systematically ask about the country of birth (Annex 4.A).
A second measure is the distinction between own-account self-employed vs. employer self-employed. Many labour force surveys across the OECD ask about the number of employees of the self-employed, or at least the size of the establishment or firm that the individual works at, including the self-employed. Own account workers are more likely to be necessity self-employed.
A third distinction is between incorporated vs. unincorporated self-employed. Unincorporated self-employed are thought as being more likely to be necessity entrepreneurs. The information on whether the self-employed are incorporated is available in labour force surveys in Australia, Canada, the United States, some Latin American OECD countries but not in European OECD countries.
Finally, the status in the labour market before entering into self-employment is also used as a proxy for the reason to start a business. Individuals who are initially unemployed before starting businesses are defined as “necessity” entrepreneurs, and individuals who are wage/salary workers, enrolled in school or college, or are not actively seeking a job are defined as “opportunity” entrepreneurs (Fairlie and Fossen, 2020[26]). This disaggregation requires panel data to have information on the labour market status of the individual over time, or at least a retrospective question on the labour market status of the individual before entering self-employment, or some fixed period earlier (typically one year). This information is available in some of the labour force surveys of OECD countries.
Immigrant self-employment remains a way to bypass difficulties in wage employment
A minority of new entrepreneurs, both foreign and native‑born, were unemployed before becoming self-employed. On average across the OECD countries included in this exercise, approximately 80% of the newly self-employed were previously in education, out of the labour market or in wage employment (Figure 4.9), 20% were unemployed. The opportunity share of the native‑born is 4 percentage points higher than that of immigrants on average (82.6% compared with 78.3%). However, these aggregate results hide significant differences across countries.
In two‑thirds of countries, newly self-employed immigrants are more likely to have been previously unemployed and may therefore be considered necessity entrepreneurs. The gaps are particularly large in Sweden (+21 percentage point), Denmark (+13 percentage points), Luxembourg (+13 percentage points). In contrast, in Spain, Portugal and the United States, the shares are similar and these are countries where the self-employment rate of immigrants is high relatively to that of the native‑born.
2017‑19
Note: The opportunity share is defined as the percentage of new entrepreneurs who created their business out of choice (coming out of employment, school, or other labour market status) instead of necessity (coming from unemployment).
Source: EU-LFS 2017-19; CPS 2017-19; Australia, Participation, Job Search and Mobility 2017-19.
The opportunity share of entrepreneurs is procyclical both for the foreign and native‑born, indicating that in favourable labour market conditions, there is less necessity entrepreneurship, i.e. that the self-employed are less likely to come from unemployment (Figure 4.10). This is in line with the literature. The opportunity rate decreased both for foreign and native‑born following the financial crisis in 2008/09 and then again with the COVID-pandemic in 2020 in the United States. Similar to other labour market outcomes, there is more variance in the opportunity share of immigrants than that of the native‑born.
Note: Starting in 2021, there is no information in the EU-LFS on the individual’s activity one year prior to the interview. Hence, it is not possible to calculate the opportunity share for European OECD countries since 2021.
Source: EU-LFS 2006-20. Data for the United States is from Fairlie, R. (2024[28]) “Indicators of Entrepreneurial Activity: 2023”, https://doi.org/10.2139/ssrn.4708111.
The 2017 ad hoc module on self-employment in the EU-LFS offers direct insights into the choice of immigrants and the native‑born to become self-employed. The results indicate that although self-employment is a choice for most individuals, immigrants are more likely to report choosing self-employment out of necessity. In OECD EU-EFTA countries,15% of immigrant self-employed chose to be self-employed because they could not find a job as an employee, compared with 8% of the native‑born (Table 4.8).
Furthermore, 19% of immigrant self-employed in the EU‑EFTA in 2017 would rather be in wage employment, compared with 16% of the native‑born (Figure 4.11), indicating difficulties in finding wage employment for immigrants. A higher share of the immigrant than native‑born self-employed would rather be an employee in all countries in the analysis, except for Czechia, Portugal and Spain.
Self-reported reasons for becoming self-employed, EU-EFTA, 2017, percentages
Source: EU-LFS ad hoc module 2017.
Share of self-employed who report they would prefer being in dependent employment, EU-EFTA, 2017, percentages
Source: EU-LFS ad hoc module 2017.
The concern on self-employment as necessity is more pressing for immigrant groups that have more difficulties integrating into the labour market. Recent evidence for OECD countries has focussed on these groups. For example, refugees in the United Kingdom and in Canada are more likely to become self-employed out of necessity (Kone, Ruiz and Vargas-Silva, 2020[29]; Green et al., 2016[30]).
Immigrant women also face more barriers in the labour market and are as a consequence more likely in some contexts to be self-employed. In the EU-EFTA, self-employed immigrant women are more likely to report they would prefer working as an employee than self-employed native‑born women (20% compared with 18%) or foreign-born men (18%). In some countries, this gap between immigrant and native‑born women is particularly large. For example, in Belgium, 24% of immigrant self-employed women declare they would prefer working as employees compared with 13% of native‑born women (EU-LFS ad hoc module 2017). In Switzerland, the shares are 23% and 9%. In the context of the large inflows of Ukrainian women to European OECD countries in 2022/23, self-employment was also an integration pathway. For example, Andrejuk (2018[31]) studies the necessity self-employment of Ukrainian women in Poland.
Another example is irregular migrants. Amuedo-Dorantes, Lofstrom and Wang (2021[32]) show for the United States that increased immigration enforcement within the country led to an increase in the number of Mexican immigrants (including migrants with irregular status) moving into self-employment to avoid increased controls.
However, durably integrating into the labour market through self-employment requires immigrant businesses to survive or be a stepping stone to wage employment. Immigrants are more likely to enter into self-employment but also more likely to exit from self-employment (Table 4.9). Immigrants are more likely than the native‑born to exit self-employment in all but 2 of the countries with available data. The exceptions are Czechia and Slovenia. In 7 out of the 17 countries, immigrants are over 50% more likely to exit self-employment than the native‑born, including Greece, Austria, Denmark, Portugal and Switzerland.
Flows into and out of self-employment, EU-EFTA, 2017‑19
Note: The flows into self-employment are calculated as the number of newly self-employed (i.e. those who were not yet self-employed in the previous year) divided by the total number of self-employed in the current year. The flows out of self-employment are calculated as the number of formerly self-employed (i.e. those who were self-employed in the previous year but no longer in the current year) divided by the total number of self-employed in the previous year.
Source: EU-LFS 2017‑19.
Immigrant women are more likely to enter but also to exit self-employment than both native‑born women and immigrant men in almost all countries with available data. The flow into self-employment was 16% for immigrant women compared with 13% for native‑born women, on average across ten European OECD countries with reliable sample sizes. Similarly, the flow out of self-employment was 12% compared with 8%.
A higher share of exits are to unemployment for immigrants than for the native‑born. In the EU-EFTA, 28% of foreign-born who were self-employed in the previous year became unemployed in the period 2017‑19, compared with 19% of the native‑born. In Belgium, immigrants were also shown to be more likely than the native‑born to become unemployed or leave the labour force after a period in self-employment (Lens, 2022[33]). This evidence supports the idea that immigrants are also pushed out of self-employment, and that entry into self-employment does not guarantee longer-term integration into the labour market.
Immigrants are more likely to participate in the gig economy and more likely to be false self-employed
Participation in the gig economy and platform work is a way to supplement household income in times of unemployment or when starting an uncertain new entrepreneurial activity. Immigrants in OECD countries are more at risk of unemployment and difficulties in integrating into the labour market (OECD/European Commission, 2023[27]). Hence, gig work may be an option to integrate the labour market. Little evidence exists so far on the participation of immigrants in gig and platform work. Identifying gig and platform work in standard data sources is challenging.
Evidence for Canada shows that immigrants are over-represented among participants in the gig economy. Based on tax records, an estimated 10.8% of all male immigrant workers who have been in Canada for less than five years participated in the “gig economy” in 2016, compared with 6.1% of male Canadian-born workers (Picot and Ostrovsky, 2021[7]). Furthermore, based on a special module of the Canadian LFS conducted in 2023, 57.5% of individuals who provided either personal transport or delivery services through an app or platform are immigrants. This is a large over-representation relative to their share among the working age population.
Evidence for the United States, based on a new nationally representative survey on Entrepreneurship in the Population (EPOP) indicates that Black and Hispanic workers, including immigrants, are more likely to participate in the gig economy than non-Hispanic White workers (Atkins, Brummet and Johnson, 2023[8]). For example, 26% of Hispanics were classified as gig workers in a broad sense, based on whether the respondent uses a platform to co‑ordinate payment for foods or services, compared with 16% of non-Hispanic White workers. Moreover, 11% of Hispanic workers declared gig work as primary job, compared with 5% of Non-Hispanic White workers. The EPOP survey asks only about ethnicity of the respondents and does not have information on the country of birth.
A concern relative to platform work is whether workers are declared as self-employed although in many cases their work conditions resemble closely those of employees. The question is whether immigrants are more likely to be in false self-employment than the native‑born. For OECD EU-EFTA countries, data from a special ad hoc module of the LFS on entrepreneurship from 2017 suggests they are.
First, self-employed immigrants are less likely to decide on their working hours. Twenty-eight percent of the self-employed immigrants do not decide freely about their working hours in the EU-EFTA countries, compared with 21% of the native‑born.
Second, self-employed immigrants are more likely to have only one client or one dominant client (19% compared with 16% of the native‑born), among those who have clients, in the EU-EFTA. This difference holds in most individual EU-EFTA countries. An exception is Czechia.
While immigrants are more likely to be pushed into self-employment, there is also evidence that they are more likely to face barriers to set up their businesses. In OECD EU-EFTA countries, for example, more immigrant employees than native‑born would like to be self-employed: 13% compared with 9%, according to data from the 2017 EU-LFS ad hoc module on self-employment. The main reason stated for not becoming self-employed in the main job for both foreign and native‑born is financial insecurity (41% for both groups). However, immigrants report more difficulties in getting financing to set up their business (21% vs. 17%).
OECD countries have various tools at their disposal to support immigrant entrepreneurship. Governments may mainstream their entrepreneurship support to immigrants or have dedicated services to support immigrant entrepreneurship specifically. Dedicated services vary in scope and focus: entrepreneurship courses, legal and administrative support, incubators, etc. They also vary in the target immigrant group: immigrants at different stages of engagement in business creation, or immigrant groups that are the target of other integration measures: recently arrived immigrants, refugees, immigrant women.
This section first reviews the legal constraints on immigrant entrepreneurship. Not all immigrants may become entrepreneurs in the host country. Second, it reviews the different types of support measures to immigrant entrepreneurs in place across OECD countries.21
Which immigrants can start new businesses in OECD countries?
A first barrier to migrant entrepreneurship is that of legal constraints. Not all immigrants have the right to establish a new business. First, immigrants need to have a legal status in the country to start a business in formal employment. Second, not all immigration statuses allow immigrants to start a business. In many cases, the immigration status of labour migrants is conditional on dependent employment, which restricts their option to open their own business. Similarly, asylum seekers and international students are other categories of migrants that have often restricted labour market access across OECD countries. Box 4.2 presents recent research showing in specific settings how legal constraints that do not allow migrants to create their businesses are in fact binding.
Legal status in the host country
Having a legal status in the country is a precondition for creating a business in the host country. A study on the effects of the mass regularisation of Venezuelans in Colombia in 2018 shows that obtaining a visa led to a 12‑fold increase in the number of registered Venezuelan entrepreneurs (Bahar, Cowgill and Guzman, 2022[34]).
Visa rules
A recent study for the United States showed that immigrant scientists and engineers tend to remain in salaried employment commensurate with their qualifications after their arrival. High-skilled immigrants tend to work in the United States under a H1‑B visa, which is for dependent employment only. However, once the immigration status constraint is lifted (i.e. once immigrants obtain a green card), they become more likely to set up their own businesses than similar native‑born workers (Agarwal, Ganco and Raffiee, 2022[35]).
Table 4.10 summarises the access to self-employment for the main immigrant categories that may not have full access to the host country labour market: labour migrants, asylum seekers, and international students during their studies. In most OECD countries, labour migrants may not start their businesses under their current visa or permit (except for holders of entrepreneur or investor visas). They first need to change their immigration status to one that allows for business creation such as an entrepreneur permit, a self-employment permit or a permit that allows for unrestricted access to the labour market (such as a family permit or permanent residence). This is because most labour permits are sponsored by an employer and are conditional on dependent employment with a specific employer or in some cases restricted to an occupation or sector.
There are some exceptions. In OECD EU countries, third-country nationals under the EU Blue Card Directive encouraged member states to allow for the possibility of exercising a (subsidiary) self-employed activity in parallel with their activity in order to promote innovative entrepreneurship. In Estonia, Finland, Greece, Latvia, Mexico and the Netherlands, immigrants under a work permit are allowed to become self-employed without changing status. Under specific circumstances, opening a business is also possible for labour migrants in Japan and the United States, or is facilitated in Korea and Türkiye. In Australia and Canada, labour migrants (referred to as economic migrants) may be accepted in the host country directly with permanent residence, and hence have full access to the labour market. In the case of Canada, some migrants also have an open permit that provides unrestricted access to the labour market.
Asylum seekers may create their own business in approximately half of the OECD countries. In these countries, once asylum seekers are allowed to work in the host country, they are also allowed to become self-employed. In most cases, there is a waiting time after the asylum application is lodged and access to the labour market is authorised. However, in some cases, asylum seekers have access to dependent employment but not to self-employment. This is for example the case in the Slovak Republic.
International students are allowed to work alongside their studies in most OECD countries (OECD, 2022[36]). In almost all cases, there are restrictions on how much international students may work (typically they are allowed part-time work), and in some cases what jobs they may hold, whether on-campus or off-campus for example. The right to work does not always extend to self-employment. In approximately half the OECD countries, international students are not allowed to create their businesses alongside their studies.
After graduating, international students may change their status to a visa or permit that allows for self-employment, such as an entrepreneur visa, if they satisfy the conditions for such status. In EU OECD countries, the Students and Researchers Directive allows students and researchers to stay in the host country for up to 9 months after the completion of research or studies, for the purpose of job-searching or entrepreneurship. Many other OECD countries also allow graduates to remain in the host country to look for a job, for up to two years in some cases (OECD, 2022[37]). During this time, graduates may also start their own business, except for Ireland. They then need to apply for a status that allows for self-employment.
Source: Policy questionnaire on Migrant Entrepreneurship (2023).
Some OECD countries facilitate the access of immigrants to their mainstream services that support entrepreneurship
All OECD countries have services to support entrepreneurship as a source of employment, innovation and economic growth. In many OECD countries, there is a dedicated national agency (such as the Austrian Business Agency or the Netherlands Enterprise Agency for example). In other countries, support to entrepreneurship is provided by innovation agencies, chambers of commerce or public employment services.
One option to support migrant entrepreneurship is to facilitate access to these mainstream services to immigrants. This is done by offering services in multiple languages and having trained staff, or specific units, able to help immigrants overcome barriers linked to lack of knowledge on host country legal and administrative procedures or specificities linked to their immigration status. This form of support to migrant entrepreneurship is one of the suggestions set forth by the European Commission in its Action Pan on Integration and Inclusion (Box 4.3).
Action Plan on Integration and Inclusion 2021‑27
In EU OECD countries, support to migrant entrepreneurs through easier access to financing, training and advice is part of the objectives of the Action Plan on Integration and Inclusion 2021‑27 of the European Commission. The Commission supports this objective by fostering inclusive mentoring schemes and by providing support for inclusive entrepreneurship under InvestEU, the EU programme to boost investment, innovation and job creation in Europe in 2021‑27.
The European Commission recommends that Member States encourage migrant entrepreneurship through tailored training and mentoring programmes. It also encourages Member States to both open up mainstream entrepreneurship support structures to migrants and to include entrepreneurship in integration programmes.
Source: European Commission (2020), Action Plan on Integration and Inclusion 2021‑27, https://home-affairs.ec.europa.eu/system/files_en?file=2020-11/action_plan_on_integration_and_inclusion_2021-2027.pdf.
Services to facilitate immigrants’ access to mainstream services on entrepreneurship are however not common in OECD countries (Table 4.11). A first possible level of support is to provide targeted information for immigrants (e.g. Switzerland, Belgium) and to provide information in foreign languages. In Belgium, Hub.Brussels, the agency that promotes entrepreneurship in the Brussels region, has an inclusive focus and provides information sessions in different languages.
The introduction of start-up and entrepreneurship visas in OECD countries in the past years has led to the development of entrepreneurship support to new, or candidate, startup visa holders. In many cases, this support is provided by, or together with, the mainstream entrepreneurship services. In some OECD countries, the support is not only for startup visa candidates from abroad but also for immigrants already in the country wishing to start an innovative firm, whether they will apply for a startup visa or not. This is the case in Austria, Flanders or the Netherlands.
Entrepreneurship support is particularly useful in countries in which it is more complex to start a business. For example, in New Zealand, which tops the World Bank Ease of Doing Business ranking, there is no specific support for immigrants already in the country wishing to set up a business.22 However, the support provided by the different government agencies and ministries is very practical and inclusive. Similarly in Estonia, support for entrepreneurship, and migrant entrepreneurship in particular, is developed and accessible.
Finally, in Colombia and the United States, the national entrepreneurship agencies services have dedicated services for vulnerable populations. In Colombia, iNNpulsa Colombia has a programme (Nucleo E) to support entrepreneurship of vulnerable populations including migrants. In the United States, the U.S. Small Business Administration (SBA) has a Council on Underserved Communities (CUC), including immigrants. Moreover, the Minority Business Development Agency in the United States also covers a broader spectrum than the immigrant population. It is an agency of the Department of Commerce dedicated to promoting the growth and productivity of businesses run by ethnic minorities, thus including immigrant entrepreneurs as well as many native‑born entrepreneurs with no direct migrant background.
Dedicated services to immigrants also exist at local level, such as the Vienna Business Agency (Wirtschaftsagentur). This one‑stop shop offers business start-up advice for immigrants or people with an immigrant background in 17 different languages, and offers workshops, coaching, individual advice and information on financing options in Vienna. Most of these agencies do not stop at business start-up, but also offer a wide range of services to help the business grow, as in Gaziantep, Türkiye (Box 4.4).
Source: Policy questionnaire on Migrant Entrepreneurship (2023).
Following the large inflows of Syrian nationals fleeing the war in 2016 to Türkiye, Syrian entrepreneurship soared in the country. Many Syrians, after obtaining their temporary protection permits, tried to recreate their businesses in the host country (in sectors as varied as catering services or manufacturing industries). The city of Gaziantep soon realised that many Syrian refugees had no knowledge of the Turkish language or of the country’s rules on setting up a business.
As a result, the Gaziantep Chamber of Commerce set up a Syrian desk in 2016. This desk aims to respond to the common problems faced by new Syrian entrepreneurs. It supports them in their administrative dealings with the authorities, and shares all useful information in the life of a business during workshops and seminars in Arabic: responses to calls for tender, access to banking services, taxation, right of residence, etc. The counter also offers training courses to enhance entrepreneurial skills (language courses, marketing, communication, quality management, foreign trade), exchanges with the Turkish business world and dedicated services to improve company performance.
Source: World Bank Group (2023[38]), Advancing Refugee Entrepreneurship.
Most countries promote entrepreneurship through integration programmes
Rather than offering services dedicated to immigrants within agencies promoting entrepreneurship, some OECD countries have opted instead to create services to support entrepreneurship within agencies dedicated to immigrant integration, or by offering entrepreneurship modules within their introduction or integration courses (Table 4.11).
In Greece and Portugal there are services dedicated to entrepreneurship in immigrant integration centres. In Greece, the Migrant Integration Centres set up in 11 municipalities, support labour market integration of third country nationals, including support on setting up a business (legal and financial advice, coaching, networking opportunities, etc.). In Portugal, the one‑stop shop for immigrants that brings together all government services needed for immigrant reception and integration includes an entrepreneurship assistance desk. This desk co‑ordinates programmes to help develop entrepreneurial projects (10‑week courses), as well as personalised follow-up for migrant entrepreneurs.
Israel is the only OECD country that has an agency to promote exclusively immigrant entrepreneurship. Under the responsibility of the Entrepreneurship Division of the Ministry of Aliyah and Absorption, the country offers five business centres for new permanent immigrants and returning residents, whose unique mission is to assist potential entrepreneurs newly arrived in the country to set up and develop their businesses. The centre’s advisors provide advice on marketing, technology use, financing and taxation in five different languages. They help with the preparation of the business model and business plan, the search for financing, etc., and invite participation in numerous workshops on topics as varied as marketing, pricing policy, ways of selling, and the best ways to advertise (especially on social media).
In most OECD countries, introduction programmes are the main gateway to integration for newly arrived immigrants. An introduction programme offers newly-arrived immigrants or targeted groups of immigrants (often humanitarian migrants) various training courses and measures covering a range of integration needs – primarily language courses, but also integration into the labour market and the host country society (OECD, 2023[39]). The idea is in this case to promote entrepreneurship as a way to integrate in the labour market. These modules may be part of the main programme, or an optional module which in some cases may also be taken later on, such as in Estonia.
Entrepreneurship modules vary in their content (Table 4.12). Almost all of the OECD countries that offer business start-up modules as part of their introduction programmes offer legal and regulatory advice, and share information on general entrepreneurial support programmes (open to all, regardless of origin) during the session. Access to finance is addressed in two‑thirds of the countries. Networking opportunities and mentoring and coaching are also offered as part of introduction programmes in two‑thirds to three‑quarters of countries.
Countries that have a module on business creation in their integration programme only
Note: In Finland, in practice, the modules vary at the regional level.
Source: Policy questionnaire on Migrant Entrepreneurship (2023).
There is a wealth of initiatives and smaller scale programmes to support migrant entrepreneurship in OECD countries
There is a wealth of initiatives and smaller scale programmes to support migrant entrepreneurship in OECD countries. These fill in the void in countries in which there are no measures nor programmes at the national level to support migrant entrepreneurship. Or complement the existing offer by focusing on specific support measures or target populations.
The increase in the number of available support measures is not without challenges. Programmes and initiatives differ widely in quality of services offered and there is seldom any programme evaluation done which would allow scaling up the most successful ones. Furthermore, the fragmentation of support measures hinders their visibility among the immigrant target group. Recent projects at the European level (MAGNET, ATHENA)23 have shown that the landscape of support to migrant entrepreneurs is indeed highly fragmented. Support measures for migrant entrepreneurship may be broadly grouped around four axes: developing the entrepreneurial skills of immigrants; learning about the host country legal framework and business regulations; coaching, mentoring and networking; and improving access to financing. Some programmes combine several support measures. We present below three programmes among those with the most complete support and broadest target groups.
The CNA World-Dedalo (Italy) is a longstanding migrant entrepreneurship support programme, first established in Turin in 2000 and which has since expanded to 25 other cities in Italy. The programme is co‑ordinated by the Turin office of Italy’s Confederazione Nazionale dell’Artigianato e della Piccola e Media Impresa (CNA, National Confederation of Crafts and Small and Medium-Sised Enterprises). The Turin Chamber of Commerce and the Sanpaolo Bank support CNA Turin in carrying out the project.
The CNA World-Dedalo programme consists of counselling and support services and a training programme for both starting and already operating entrepreneurs. The support services offer legal advice both on business regulation and on immigration laws. Furthermore, the programme offers support for migrant entrepreneurs to open a bank account and access financing. The programme has set up a credit guarantee consortium (Consorzio Fidi), whose main activity is to act as guarantors for banks and facilitate access to loans for migrant entrepreneurs (OECD, 2019[40]).
The Capacity Entrepreneurship Programme Zurich (Switzerland) was established in 2015. It is a comprehensive programme offering training and access to an incubator to anyone from a non-European background. Selected candidates are supported by mentors and coaches from the region with experience in startups and connections in the local entrepreneurial environment. The support includes developing the business model, help with understanding the Canton’s legal requirements, finding partners and investors, and integration into the local business network.
In Ireland, Technological University Dublin launched an entrepreneurship training programme for immigrants, refugees and asylum seekers in 2023. The programme targets migrants who already have a business idea but have not implemented yet. This is a small programme – there were 54 participants in the 2023 pilot edition – that provides complete support. The initiative offers 12 lectures on the different stages of setting up a business project, followed by four weeks in which students have to set up and submit a business plan supported by a mentor. Migrants whose final business proposals are considered sustainable will be eligible to make a presentation for potential funding. The programme is funded by the Higher Education Authority and the mentoring is supported by Open Doors Initiative.24
Some programmes target migrant groups who face more challenges in setting up their businesses and in integrating into the labour market more broadly. In the last ten years, there has been a sharp increase in the number of initiatives that promote entrepreneurship as a pathway for refugees to integrate into the labour market, namely following the main refugee waves to OECD countries in this period, from Syria, Venezuela and Ukraine. Box 4.5 presents some of these programmes.
Some recent programmes in OECD countries provide targeted support to migrant women entrepreneurs. Women are significantly under-represented among entrepreneurs and face specific barriers to entrepreneurship, such as differences in financial resources, differential access to external resources, society’s different expectations of women and the unequal impact of policies and rules governing entrepreneurship (OECD/European Commission, 2023[41]). A concern is that immigrant women face a double penalty in the labour market.
In the EU context, a recent transnational project, ATHENA (Approaches to valorise high entrepreneurial potential of migrant women to contribute to their social and economic integration),25 ran from January 2021 to April 2023 in Belgium, Germany, Greece, Lithuania, Italy and Spain, and was funded by the EU Asylum, Migration and Integration Fund (AMIF) programme. Some of the outputs of the project were good practice reports and practical manuals for support providers. The project also provided direct support to 251 immigrant women entrepreneurs and support 67 organisations in strengthening their support offers.
Recent initiatives targeted at migrant women emphasise networking and the importance of mentoring and role models. In Belgium (Flanders), the SheDIDIT project started in 2018 provides a platform for migrant women wishing to embark on a business project. Participants are supported in their project by mentors or coaches who are also women entrepreneurs with a migrant background. The Springboard programme run by the Norwegian NGO Diversify also offers training and mentoring for people of immigrant origin wishing to set up their own business, with a focus on women. Set up in September 2023, “STAGE – for international FEMpreneurs” project is a networking platform bringing together female entrepreneurs with immigrant backgrounds and is part of the German action plan on “More women entrepreneurs for our SMEs”. Finally, in Estonia, a recent initiative supported refugee women from Ukraine, as the majority of displaced adults from Ukraine were women (Box 4.5).
In the past decade, many diverse programmes and initiatives to support entrepreneurship of humanitarian migrants were introduced in OECD countries. Some are public initiatives at the national or local level while others are developed by the civil society. Below are some examples of programmes targeted at refugees in OECD countries. For more case studies, see for example (OECD, 2019[40]; OECD/European Commission, 2021[42]; OECD/European Commission, 2023[41]).
Startup Refugees (Finland)
In Finland, the Startup Refugees association offers a 10‑week course in various languages aimed at new arrivals (immigrants, refugees and asylum seekers) wishing to set up their own business project. The course explains how to turn an idea into a concrete project, how to develop a base of future consumers, how to get a better grasp of financial calculations, and how to deal with Finnish bureaucracy. Startup Refugees has helped more than 1 000 immigrant entrepreneurs in Finland to develop their project since their foundation in 2016.
Singa (France)
In France, the SINGA association since 2012 has been developing programmes to connect newly arrived refugees and immigrants with members of the host community on the basis of common interests, professional affinities and shared passions. In 2016, SINGA inaugurated the space KIWANDA – la Fabrique des “interpreneurs”, located in the heart of Paris, and which welcomes immigrant project leaders and native entrepreneurs with migration-related projects. Meetings take place in this space, which also contributes to the development of the social and professional network of new arrivals wishing to set up their own business. At the same time, the association has developed pre‑incubation (2 months) and incubation (6 months) programmes. These programmes raise awareness of entrepreneurship (innovative or otherwise) in 8 cities across France. Since 2016, they have supported 20 projects a year. In parallel, SINGA Paris now offers 9‑month acceleration programmes for 7 to 8 candidates per year. SINGA offers tailor-made support in the following areas: financing and fund-raising strategy, marketing and growth, communication, HR strategy and softskills development support, essential steps in structuring a developing business in the midst of scaling up.
Initiatives to support entrepreneurship of displaced Ukrainians
The war of aggression of Russia against Ukraine had displaced 5 million Ukrainians to OECD countries as of June 2024. OECD countries were proactive in facilitating access to the labour market to this population, including access to self-employment. Poland for example opened an exception to allow for self-employment of Ukrainians holding a work permit (Table 4.10). Some countries also introduced programmes to support entrepreneurship of this population. Some examples are below.
Hub IVDK (Denmark)
Denmark’s entrepreneurship promotion agency, IDVK (Entrepreneurship Denmark), has set up the IVDK Hub, an entrepreneurship support programme for Ukrainians, which has benefited over 1 000 entrepreneurs since its inception. The programme comprises three workshops of ten modules each, with each module offering different levels of experience (beginner, intermediate, experienced). Candidates can structure their curriculum according to their own needs, this flexibility allowing them to go at their own pace, focusing on the modules they deem most relevant to their knowledge.
WeStart (Denmark)
In Denmark, Startup Ukraine, Google and the Danish entrepreneurs’ organisation have set up the WeStart programme. This free 6‑week training course is aimed at 50 Ukrainian women with temporary status. The course covers topics such as setting up a business, financing, business strategy, attracting consumers online and the transition to a marketing strategy.
Empowering Women entrepreneurship programme (Estonia)
The Empowering Women Entrepreneurship Programme Estonia 2023 supported hundreds of Ukrainian women displaced by Russia’s war of aggression. Under the direction of the Estonian Refugee Council and the Garage48 association, this initiative offered comprehensive entrepreneurship training followed by 6 months of mentoring, including psychological support.
Initiatives to support entrepreneurship of displaced Venezuelans in Colombia
Colombia currently hosts over 2 million displaced Venezuelans. Most of the active Venezuelans are self-employed. In this context, several initiatives were introduced in the past years to support refugee entrepreneurship.
In Colombia, 60 Venezuelan entrepreneurs living in the department of Nariño were supported to set up their own businesses after receiving grants from the Norwegian Refugee Council, via the SENA (Servicio Nacional de Aprendizaje) entrepreneurship promotion agency. These entrepreneurs have invested in a variety of sectors, including gastronomy, carpentry, garment manufacturing and healthcare.
The Oportunidades para Emprender initiative was developed by the Ministry of Commerce, Industry and Tourism, iNNpulsa Colombia and USAID Colombia’s Opportunities Without Borders project. The first phase of the initiative was to launch a large survey to understand and identify the needs of enterprises led by Venezuelan migrants, Colombian returnees, to then respond more effectively to support the creation and/or strengthening of businesses. The aim is then to connect migrant entrepreneurs with existing entrepreneurship initiatives of iNNpulsa Colombia, USAID’s Opportunities Without Borders Project among others.
The weight of immigrants among entrepreneurs has increased significantly in OECD countries over the past 15 years. In 2022, 17% of the self-employed in OECD countries on average were migrants, up from 11% in 2006. This increase was driven both by the increase in the migrant population and by the increase in the self-employment rate of immigrants relative to the native‑born.
This increase translated into significant job creation. There are an estimated additional 0.2 jobs in the economy per additional migrant in the working age population through entrepreneurship, on average across 25 OECD countries. This is similar than for the native‑born but given the large migrant flows to OECD countries of the past years, a back of the envelope calculation suggests that migrant entrepreneurship added 4 million jobs to these 25 OECD economies from 2011 to 2021.
While immigrants are over-represented among the founders of some of the most successful firms in the OECD, in practically all countries immigrant firms are smaller than those of the native‑born, with similar demographic characteristics and operating in the same sectors. Better understanding how migrant and native‑born firms develop over time is crucial to design policies capable of addressing the potential difficulties and growth constraints faced by migrant entrepreneurs. Unfortunately, there is not enough research on the paths of migrant firms in OECD countries. An exception is the United States and Canada where the linking of different sources of administrative data has been mobilised to address this question.
Furthermore, immigrants are more likely than the native‑born to be own-account workers, to be in false self-employment and recent evidence from some OECD countries indicates they are also more likely to participate in the gig economy. Monitoring migrants’ participation in the gig economy and platform work and how it interacts with the usual measures of self-employment and unemployment will also be key to ensure that migrants fully integrate in the host country labour market in a sustainable way.
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Global Entrepreneurship Monitor (GEM) surveys
The Global Entrepreneurship Monitor (GEM) is an international initiative that aims at measuring entrepreneurship activities and attitudes around the world through annual surveys of the adult population (ages 18 and older) (OECD/European Commission, 2021[42]). GEM surveys cover about 100 countries, including 28 OECD countries. The survey collects information on individuals’ attitudes towards entrepreneurship, their pre‑start-up activities, their work on the initial phase of their firm, their involvement in the established phase of the firm and in business closures. Although the data contains detailed information on individual characteristics of entrepreneurs, the country of birth is collected in a few countries only. The 2012 GEM survey included a special module on migrant entrepreneurship. This special module has not been implemented again since. Nevertheless, a few countries (Germany for example) collect this data annually.
Individual and household surveys
Individual and household surveys are a popular data source to study entrepreneurship, mainly because of the ease of access and broad availability of data, which allows for highly comparable results across countries. These surveys typically record self-employment status. The availability of detailed demographics and socio‑economic background information on the self-employed individual, including country of birth, is a significant advantage of this type of data. A major drawback is the lack of information available about the firms individuals work in. Some surveys report the size of firms, although this is not available for all countries. Further information on firm outcomes is not available.
Surveys or administrative data at the firm level
Unlike individual or household surveys, surveys at the firm level have the advantage of providing much more detailed information on the basic characteristics of firms, and on their outcomes, such as sales, income, and number of employees. However, there is often little to no information available on the owner or founder of the firm. In particular, the country of birth of the owner or founder is often not available, which makes this type of data unsuitable for studying migrant entrepreneurship. In recent years, efforts have been made to link firm-level data with other sources of administrative data in order to obtain a more comprehensive picture of entrepreneurship. For the United States, the Longitudinal Business Database (LBD) has been matched with tax records and the Census to provide information both on firm outcomes and on the founders of the firm (defined as the top earners in the first years of the firm) (Kerr and Kerr, 2017[43]; Azoulay et al., 2022[14]). For Canada, personal tax records have been matched to firm tax records and to administrative records of new permanent residents upon arrival in Canada to study migrant entrepreneurship and migrant firms (Green et al., 2016[30]; Picot and Ostrovsky, 2021[7]).
Table 4.7 presents a lower bound estimate of the number of jobs created per foreign-born and per native‑born in the working-age population and decomposes it into different margins.
The number of jobs created can be decomposed into the share of self-employed in the working age population and the average number of jobs that each self-employed creates (A=B*C):
In addition the average number of jobs created per self-employed depends on the share of the self-employed who have employees and how many jobs the latter create (C=1*(1‑C1)+C1*C2)
So that:
To estimate the number of jobs created by the self-employed (including their own job), the lower bound of the firm size interval is used and the job of the self-employed is added. This means that if a self-employed has no employees, it is considered that he or she created one job, if the firm has 1‑9 employees, 2 jobs were created, if the firm has 10‑19 employees, 11 jobs were created and if the firm has 20+ employees, 21 jobs were created. This example is based on the firm size intervals reported in the EU-LFS. It will differ for other countries depending on the intervals used to report firm size.
A limitation of this approach arises from the fact that most labour force surveys report firm size as the number of people working for the local unit, rather than the entire firm. Consequently, if an entrepreneur has a firm comprising multiple units, the number of jobs created by this firm will be underestimated.
2022 (or latest available)
Note: In Luxembourg, the share of immigrants among entrepreneurs is 69% and 57% among the working age population. Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; CASEN 2022; GEIH 2022; ECE 2022; ENOE 2022; Canada LFS 2022; Australia, Characteristics of Employment 2022; New Zealand LFS 2021; Japan, Census 2020; SILCLF 2021 & EAPS 2021.
In thousands, 2006 (or earliest available) and 2022 (or latest available)
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2006, 2019 and 2022; CPS ASEC 2006 and 2022; Australia, Characteristics of Employment 2014 and 2022; CASEN 2009 and 2022; GEIH 2022; ECE 2011 and 2022; ENOE 2006 and 2022; New Zealand LFS 2021; Israel LFS 2020; Japan, Census 2020; SILCLF 2021 & EAPS 2021.
2022 (or latest available)
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022.
Percentages, 2022 (or latest available)
Note: Top ten sectors of activity only. Data for the United Kingdom is for 2019.
Percentages are in bold if immigrants are over-represented in the sector, that is if the share of immigrants among the self-employed in the sector is larger than the share of immigrants among the total self-employed population.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; Australia, Characteristics of Employment 2022; CASEN 2022; GEIH 2022; ECE 2022; ENOE 2022; Canada LFS 2022.
2022 (or latest available)
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; Australia, Characteristics of Employment 2022; CASEN 2022; GEIH 2022; ECE 2022; Canada LFS 2022.
2022 (or latest available)
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; Australia, Education and Work 2022; CASEN 2022; GEIH 2022; ECE 2022; Canada LFS 2022.
Linear Probability Models, 2021‑22 (or latest available)
Note: Year fixed effects are included in all models; country fixed effects are included in models (1) and (7). Data for the United Kingdom is for 2018‑19.
Source: EU-LFS 2018‑19 and 2021‑22; CPS ASEC 2021‑22.
2022 (or latest available)
Note: Data for the United Kingdom is for 2019.
Source: EU-LFS 2019 and 2022; CPS ASEC 2022; CASEN 2022; GEIH 2022; ECE 2022.
2021‑22 (or latest available)
Note: A=B*C=B*[(1‑C1)+C1*C2], For the United States it is not possible to distinguish between self-employed with and without employees using CPS data. Therefore, the number of incorporated companies is used as a proxy for the number of self-employed that have employees for columns C1 and C2. Data for the United Kingdom is for 2018‑19. See Annex 4.A.
Source: EU-LFS 2018‑19 and 2021‑22 (except for DNK, IRL, ISL, SVN, PRT, 2017‑19); CPS ASEC 2022‑23; Australia, Work-Related Training and Adult Learning 2020‑21; CASEN 2022; GEIH 2022; ECE 2022.
Linear probability model of the probability that the self-employed have no employees and that the self-employed with employees have 10 or more employees, EU-EFTA, 2017‑19
Note: The estimations are those of a linear probability model. In the first three columns, the dependent variable is a binary variable that equals 1 if the self-employed individual has no employees; 0 if he/she does have employees. In the last three columns, the dependent variable is a binary variable that equals 1 if the self-employed with employees has 10 or more employees; 0 if he/she has fewer than 10 employees.
Source: EU-LFS 2017‑19.
← 1. According to the OECD-Eurostat Entrepreneurship Indicators Programme, an entrepreneur is an individual who seeks to generate value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets (Ahmad and Seymour, 2008[44]).
← 2. See for example Katz and Krueger (2019[50]) for the United States.
← 3. The OECD/EU/ILO definition of digital platform employment refers to activities associated with producing goods or services completed through or on a digital platform, when the digital platform or app controls and/or organises essential aspects of the work, such as controlling access to clients or facilitating the payment (OECD/ILO/European Union, 2023[46]).
← 4. Gig work is a form of employment characterised by short-term jobs or tasks which does not guarantee steady work and where the worker must take specific actions to stay employed. According to the UNECE definition, gig workers are people who accept short-term tasks, projects, or jobs; are paid per unit of work delivered; have no assurance of steady employment and must make specific efforts on their own to obtain each task, project, or job (UNECE, 2022[49]).
← 5. Dependent self-employment refers to self-employed workers who are operationally or economically dependent on another person or business such as a main client, a supplier, or an app. There is no international definition of false self-employment. In most countries, self-employment will be considered to be false self-employment if in addition to the worker being dependent on a single client (i.e. dependent self-employment), he/she also has little freedom in deciding over working hours, the way work is carried out, the place of work, etc (OECD, 2018[45]).
← 6. As in most of the literature, the agricultural sector is excluded from the analysis.
← 7. According to the ILO definition, self-employment jobs are jobs where the remuneration is directly dependent upon the profits, or the potential for profits, derived from the goods and services produced (where own consumption is considered to be part of profits).
← 8. If the self-employment rates of immigrants and native‑born in each country had remained the same in 2022 than they were in 2006, the share of immigrants among the self-employed in 2022 would have been 16.1% on average across the 27 countries for which we have data both for 2006 and 2022, instead of the actual 17%. The average share of immigrants among the self-employed in these countries in 2006 was 10.7%.
← 9. For Italy, Brunetti and Zaiceva (2023[47]) find that immigrants are less likely to be self-employed than the native‑born and that this gap remains despite controlling for a variety of factors, including access to credit, importance of migrant networks, easiness of doing business, and expenditures on services for migrants.
← 10. See for example: www.bls.gov/spotlight/2016/self-employment-in-the-united-states/home.htm; www.stlouisfed.org/on-the-economy/2022/jul/self-employment-returns-growth-path-pandemic; Atalay, Kim and Whelan (2014[48]); European Commission (2015[10]).
← 11. www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/understandingchangesinselfemploymentintheuk/january2019tomarch2022.
← 12. In 2022, the share of unincorporated self-employed among all employed for foreign and native‑born are: 6.7% and 6% in Canada, 15.4% and 14.8% in Chile, 21.3% and 20.9% in Costa Rica, 8.5% and 5% in the United States.
← 13. According to this taxonomy, high intensity R&D sectors are Pharmaceuticals; Computer, electronics and optical products; Scientific research and development. Medium-high R&D intensity sectors are: Other transport equipment; Motor vehicles, trailers and semi-trailers; Machinery and equipment n.e.c.; Chemicals and chemical products; Electrical equipment; Publishing activities; IT and other information services.
← 14. As a comparison, approximately 10% of workers were employed in high or medium-high R&D sectors on average in OECD European countries in 2022, double the percentage among the self-employed.
← 15. The distinction between incorporated and non-incorporated self-employment is not available in the EU-LFS. For France, using an alternative data source third-country nationals are shown to be under-represented among founders of innovative and high intensity R&D firms. The differences between the groups remain small.
← 16. Based on firm survey data for the United States and a different classification of innovative sectors, Lee et al. (2023[11]) and Brown et al. (2019[21]) find similar results. Immigrant firms are also more likely to be in the high-tech sector (sectors with either a large STEM workforce or high R&D) compared to firms with no foreign-born owner. The share of firms in the high-tech sector is small both for the foreign and native‑born (6.4% and 4.9%).
← 17. These studies are based on the Annual Survey on Entrepreneurs (Brown et al., 2019[21]; Lee et al., 2023[11]) and on the Annual Business Survey matched with the Linked Employer-Household Dynamics (LEHD) database (Chodavadia et al., 2024[13]).
← 18. This study is based on the Survey on Financing and Growth of Small and Medium Enterprises (2011, 2014, 2017),
← 19. The data available on the number of employees corresponds to the establishment size and is available only in brackets (under 10, 10‑19, 20‑49, 50‑249, 250+ for example for European countries). The calculation assumes that the number of employees is the lower bound of the interval.
← 20. www.innpulsacolombia.com/portfolio/encuesta-revela-que-el-59-de-los-emprendimientos-liderados-por-migrantes-en-colombia-estan-generando-al-menos-1-empleo-a-poblacion-colombiana-o-venezolana/.
← 21. Unless cited otherwise, data and policy evidence were collected via a questionnaire on migrant entrepreneurship, from November 2023.
← 22. There is specific support for immigrants applying for the entrepreneur resident visa or entrepreneur work visa from abroad.
← 23. www.migrantacceleration.eu; https://athenaproject.net/.
← 24. The 2024 edition of the course was funded by Broadlake, entrepreneurial investors.