Economic associations of immigrant self‐employment in Canada

In the last 30 years or so we have seen a proliferation of research projects on immigrants and non‐white minorities in the labour market (labour market segmentation) and as entrepreneurs (ethnic entrepreneurialism). Each of these literatures helps us understand the nature of immigrant and minority participation in the labour market, but each only offers a partial view. In this paper, I bring these topics together in an empirical investigation of the relationship between ethnic labour market segmentation and ethnic entrepreneurialism in Canada, using 1996 census data. I show that there is a close correspondence between the niches where immigrants and minorities find work, and those where they become entrepreneurs. Immigrants who are drawn to niches that offer few opportunities for self‐employment have low rates of entrepreneurship and, conversely, those who are over‐represented in niches with considerable scope for self‐employment are inclined to establish their own businesses. This shows that the propensity for self‐employment is, to an important degree, determined in the regular labour market. Therefore, entrepreneurship should not be seen as an intrinsically cultural phenomenon (i.e. that certain groups are “naturally” entrepreneurial), but instead as arising out of the opportunity structure associated with wage and salary labour.