Pathways to Entrepreneurship: Migration and Citizenship

Focusing on the whole population residing in Denmark from 2003-2013, we study how immigration and citizenship statuses affect engagement in entrepreneurship and the incomes of entrepreneurs. Entrepreneurial propensities are highest for immigrants (people born abroad), followed by returnee emigrants (those born in Denmark who spent time residing abroad), internal migrants (born in Denmark but who have resided in multiple regions of Denmark during their lifetime), and non-movers (born in Denmark and who always resided in their region of birth). However, we also find the marginal effects of migrant status on the probability of engaging in entrepreneurship lose significance when comparing foreign citizens of different migrant statuses. Having foreign citizenship decreases the probability of becoming an entrepreneur, but only for immigrants. When studying the incomes of entrepreneurs, we find the incomes of all types of migrant entrepreneurs to be lower than those of non-movers. Finally, we find foreign citizenship is associated with lower income for migrant entrepreneurs but not for non-mover entrepreneurs. Our results carry two special implications for immigrant entrepreneurship: mobility per se is associated with an increased probability of engaging in entrepreneurship, and legal status may be a major impediment for migrant entrepreneurs.