Exploring Self-Sufficient Labor Market Paths of Entrepreneurial Forced Migrants: The Role of Neighborhood Poverty and Co-Ethnics

Abstract

We employ sequence analysis to explore the heterogenous labor market paths of entrepreneurial Iraqi immigrants in Sweden, a group of forced migrants whom we follow from their year of immigration (2006–2009) to 2019. Using both individual and geographic characteristics, our main objective is to analyze how neighborhood characteristics are associated with individuals’ likelihood of following self-sufficient labor market paths, leading to an income large enough to support themselves. The results show that residing among self-employed co-ethnics is positively related to the engagement in own self-employment, while we find a negative relationship between neighborhood poverty and the likelihood of pursuing a labor market path leading to self-sufficiency. A novel finding is that having self-employed Iraqi neighbors is primarily associated with necessity entrepreneurs, who experience relatively long periods of non-self-sufficiency and limited participation in the regular labor market. As expected, the results show that highly educated and skilled individuals are more likely to follow self-sufficient labor market paths. Our findings thus encourage efforts to mitigate socioeconomic disadvantages, support necessity entrepreneurs, and enhance education levels in disadvantaged groups.