Canadian Race Relations Foundation

This study considers the reasons for immigrants' self-employment in Canada. Amongst the main explanations are: 1) employment obstacles lead to self-employment as an alternative to salaried work, and 2) the growth of immigrant enclaves leads to profitable economic returns for immigrant entrepreneurs. The first suggestion leads to the assumption that the earnings of self-employed immigrants are not as good as those of salaried immigrants, whereas the second suggestion assumes that these earnings are better than those of salaried immigrants. Li found that the year of landing to Canada, and the years spent in Canada have an effect on the earnings of immigrants, when considering different cohorts. Nonetheless, even after adjusting for differences in other factors, Li found that self-employed immigrants earned less than their salaried counterparts. Furthermore, salaried immigrants had a better opportunity for increased earnings over time. As such, the findings suggest that immigrants' self-employment is a response to the employment barriers they face once in Canada. These findings differ from census data results (Li, 1997), and so Li provides explanations for these apparent discrepancies.