Self employment among the children of Canadian immigrants: a pathway to economic advancement?

Teresa Abada, University of Western Ontario
Feng Hou, Statistics Canada
Yuqian Lu, Statistics Canada

Immigration scholars have underscored the importance of self-employment as a pathway to upward mobility among immigrant populations. Limited opportunities in the open market including lack of English proficiency, discrimination, and lack of credentials (or credentials from unrecognized foreign universities) are noted as reasons to engage in self employment (Gold Light and Johnston, 2006) while human capital skills also contribute to immigrants’ inclination to be self-employed (Li, 2001). Most studies on self employment have focused on the foreign born population. Little is known about the patterns of entrepreneurship among the children of immigrants. Differences in levels of human capital, demographic characteristics, cultural adaptation and modes of entry among immigrants will likely yield various patterns of generational change in self-employment rates among the second generation (Gold et al. 2006). Most of the children of Canadian immigrants have achieved intergenerational educational mobility (Abada et al. 2008) and in comparison to their parents, they are more proficient in the official languages (English or French). Also, growing up in Canada and having being exposed to mainstream values and norms, it is possible that the second generation may experience lower rates of self employment. Using the 2006 Census, this study examines various patterns of change in self-employment between the first and second generation. We explore whether the earnings’ returns to education and experience differ in self-employment and paid labour market among the fathers’ generation as well as the second generation. The results of the study will yield valuable insights into the economic integration of the children of immigrants and whether entrepreneurship presents an alternative route to upward mobility.