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Foreign-Born Self-Employed in the United States

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Foreign-Born Self-Employed in the United States

This month's Spotlight examines social and economic characteristics of the foreign-born population engaged in self-employment in the United States. Self-employment of immigrants may shed light on economic mobility and their ability to access the mainstream labor market.

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Definition of Self-Employed
Self-employed refers to persons who reported to be self-employed in their own incorporated or not incorporated business, professional practice, or farm.

However, for the purposes of this article, "self-employed" includes individuals between ages 18 and 64 who were in the civilian labor force and reported no farm self-employment income or farm-related occupations.

The data used come from the 1 percent 1970-2000 Integrated Public Use Microdata Series (IPUMS) and the Census 2000 5 percent Public-Use Microdata Sample (PUMS).


About one in every 10 foreign born was self-employed.
According to Census 2000, approximately 1.4 million (10.4 percent) foreign born were in self-employment. At the same time, the foreign born accounted for about 13.5 percent of all self-employed workers in the United States in 2000.

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The number and proportion of foreign born in self-employment increased between 1970 and 2000.
According to the U.S. Census, the number of self-employed foreign born increased 4.6 times (from 314,428 to 1,429,345) between 1970 and 2000 (see Figure 1). During the same period, the number of native-born workers who were self-employed doubled. Of the total foreign born in the labor force, 8.8 percent were self-employed in 1970 compared with 10.4 percent in 2000. The percent of native-born self-employed workers increased from 7.2 percent in 1970 to 9.4 percent in 2000.


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Among the foreign born, immigrants from Greece, Syria, Korea, and Israel had the highest rates of self-employment.
Among the foreign born by country of birth, those with the highest self-employment rates in 2000 were from Greece (26.9 percent), Syria (26.2 percent), Korea (25.4 percent), and Israel (25.2 percent). Those born in Jordan (23.3 percent), Paraguay (23.3 percent), Iran (22.6 percent), Lebanon (22.1 percent), Hungary (19.5 percent), and Iraq (19.0 percent) rounded out the top 10 groups with the highest rates of self-employment.

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Latinos, Asians, and whites each constitute about 30 percent of total foreign born in self-employment.
According to Census 2000, of total foreign born engaged in self-employment, 34 percent (486,489) were Latinos, 31.4 percent (448,904) were non-Latino whites, and 27.7 percent (395,641) were non-Latino Asians (see Table 1). In contrast, the overwhelming majority of native-born self-employed (90 percent or 8,226,152) were non-Latino whites.

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Twenty percent of self-employed foreign born worked in just five out of a possible 979 occupations.
According to Census 2000, the top five occupations reported by the foreign born engaged in self-employment are managers and supervisors of retail sales workers (6.4 percent), maids and housekeeping cleaners (5 percent), child care workers (3.7 percent), food service managers (3.6 percent), and physicians and surgeons (3.3 percent).

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Table 1. Self-Employment Rates by Nativity, Gender and Arrival Cohort, 1970-2000
 
Foreign born
 
Native born
 
Total
Men
Women
 
Total
Men
Women
Number of all workers
13,797,445
8,188,377
5,609,068
 
97,023,027
51,695,603
45,327,424
Number of self-employed
1,429,345
932,326
497,019
 
9,142,372
6,023,508
3,118,864
Percent of total workers
10.4
11.4
8.9
 
9.4
11.7
6.9
        
Demographic and social characteristics of self-employed       
Race and ethnicity        
  Percent non-Latino whites31.432.329.7 90.090.888.4
  Percent non-Latino blacks4.74.94.3 4.74.15.9
  Percent non-Latino Asians27.726.829.4 0.70.70.8
  Percent non-Latino other race2.22.32.1 1.41.31.4
  Percent Latino34.033.834.6 3.23.13.4
Age (average in years)43.543.443.6 44.444.743.7
  Percent men65.2
--
--
 65.9
--
--
  Percent married75.879.069.9 72.974.170.6
Educational attainment       
  Percent with no high school diploma28.028.227.6 9.510.67.4
  Percent high school graduates20.418.923.2 26.826.926.6
  Percent with some college/bachelor's degree 37.237.137.4 49.447.453.2
  Percent with graduate degree14.415.811.8 14.415.212.8
Economic characteristics       
  Hours worked in 199944.446.939.6 43.646.937.4
  Weeks worked in 199946.647.145.6 47.648.846.1
Self-employment income in 1999 ($)        
  Average22,427 25,536 16,595  25,083 29,538 16,477
  Median10,000 10,000 8,000  10,000 12,000 7,000

The occupations of the foreign-born self-employed varied between men and women.
Nearly 30 percent of foreign-born, self-employed women worked in three occupations: maids and housekeepers, child care workers, and supervisors and managers of retail sales workers. About 16 percent of self-employed, foreign-born men worked in a different set of three occupations: supervisors and managers of retail sales workers, grounds maintenance workers, and physicians and surgeons.

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About 30 percent of all foreign born in self-employment reported having a bachelor's or higher degree.
Among foreign born engaged in self-employment in 2000, 30.4 percent reported having a college-level or higher education while 28 percent did not have a high school degree. Among native-born self-employed, 33.2 percent reported having a college-level or above education while only 9.5 percent did not have a high school diploma.

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On average, self-employed foreign born earn less than their native-born counterparts.
In 2000, the average annual net income from self-employment activities among the foreign born was $22,427, which was 10.6 percent lower than the average net income ($25,083) of the native born.

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The Miami metropolitan area had the highest rate of self-employment among the foreign born.
The self-employment rates vary considerably among the foreign born living in the four metropolitan areas with the largest foreign-born populations (see Table 2). Of these four areas, Miami, Florida, had the highest rate of self-employment among the foreign born (13.3 percent), followed by Los Angeles-Long Beach, California (12.3 percent), then by New York, New York (10 percent), and Chicago, Illinois (8.9 percent).

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Table 2:  Top Five Self-Employed Foreign-Born Groups by Country of Birth in Selected Primary Metropolitan Statistical Areas (PMSAs): 2000
PMSATotal civilian labor force, ages 18 to 64Percent self-employed
Los Angeles-Long Beach  
Total3,295,48412.3
   Native1,842,12611.9
   Foreign born1,453,35812.8
      Syria3,17038.8
      Israel8,13732
      Korea53,09530.6
      Lebanon8,74427.8
      Iran37,70126.9
   
New York  
Total3,304,9159.5
   Native1,960,3939.2
   Foreign born1,344,52210
      Israel10,70724.1
      Korea31,27924.1
      Greece13,16823.9
      Brazil8,89819.8
      Pakistan14,59717.3
   
Chicago  
Total3,363,4718.3
   Native2,681,0928.2
   Foreign born682,3798.9
      Korea14,45023.4
      Greece8,87222.3
      Italy11,16616.8
      Poland68,85815.5
      Germany12,77513.2
   
Miami  
Total798,15012.6
   Native333,87411.6
   Foreign born464,27613.3
      Brazil5,35623.6
      Argentina7,59818.2
      Columbia33,67915.2
      Cuba201,23314.4
      Peru11,02614.1

Source: U.S. Census Bureau, Census 2000 5 Percent Public Use Microdata Sample

Note: A Primary Metropolitan Statistical Area (PMSA) is an area defined by the Office of Management and Budget as a Federal statistical standard, comprised of one or more counties (county subdivisions in New England), within a metropolitan area, having a population of 1,000,000 or more. When PMSAs are established, the larger area of which they are component parts is designated a Consolidated Metropolitan Statistical Area.