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Immigrants in major industrialized countries are disproportionately represented in self-employment as compared to the domestic-born. However, there is no consensus regarding whether the determinants of self-employment are similar for immigrants and non-immigrants. Furthermore, little is known about whether children of immigrants are influenced by the same factors as their parents in choosing self-employment.

Using a generational cohort method and data from the 20% sample file of the 1981 Canadian Census and the 20% sample file of the 2006 Canadian Census, this study examines whether the effects of three important determinants of self-employment-expected earnings differentials between paid employment and self-employment, difficulties in the labour market, and ethnic enclaves—differ between immigrants and the Canadian-born, between children of immigrants and children of the Canadian-born, and between children of immigrants and their parents.

The results suggest that difficulties in local labour markets had a stronger "push" effect on self-employment among immigrant fathers than among Canadian-born fathers. In comparison, the expected earnings differential had a stronger effect among Canadian-born fathers than among immigrant fathers. Both sons of immigrants and sons of Canadian-born were more strongly affected by expected earnings differentials than were their parents, while difficulties in local labour markets were not a significant factor for them. The local concentration of an ethnic group was not positively associated with the self-employment rates among either immigrants or the children of immigrants. The choice of self-employment among young women, regardless of their parents' immigrant status, was strongly associated with the expected earnings differential and years of experience in 2006, while this was not so among their mothers 25 years previously.

More studies from the Social Analysis Division related to immigration and labour market adjustment are available at Update on Social Analysis Research (www.statcan.gc.ca/socialanalysis).

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