Based on unique register data of male immigrants in Denmark, we investigate if immigrants use
self-employment as a last resort to avoid non-employment. To identify self-employment as a last
resort, we develop a general framework to identify types of indivuduals based on transitions
probabilities among all states. The states here are wage-employment, non-employment and selfemployment.
The transition probabilities are estimated using discrete competing risks models
controlling for unobserved heterogeneity and duration dependence. We find that for certain
groups of immigrants, a large fraction can be characterized as using self-employment as a last
resort. |
