A UWindsor study says self-employed new immigrants often end up with lower incomes. Reza Nakhaie’s study, Economic Benefits of Self-Employment for Canadian Immigrants, is published in the latest issue of the Canadian Review of Sociology.

Dr. Nakhaie, a professor in the Department of Sociology, Anthropology and Criminology, says there is a common argument that for disadvantaged immigrants who come to Canada seeking the land of opportunity, self-employment offers a lucrative alternative to wage labour.

“Ethno-racial immigrants may feel it is a way to transcend the limitations of salaried employment and advance into economic prosperity, but it is just myth,” says Nakhaie.

Using data from the 2006 Canadian census, Nakhaie evaluated the economic benefits of self-employment in Canada for 12 groups of ethno-racial immigrants. His findings reveal a lackluster economic reality for minority immigrants who pursue self-employment.

The study indicates that ethno-racial immigrant groups almost always earn less through self-employment than through wage and salary employment. Nakhaie attributes this to a myriad of factors, including language barriers, limited access to capital, customer discrimination, and a lack of familiarity with business laws and dominant cultural values.

“While some are attracted into self-employment by economic benefits or perks like job flexibility, many ethno-racial immigrants are pushed into self-employment as a last resort,” says Nakhaie.

One exception to the rule was the white-collar sector. Ethno-racial immigrants who enter into law, medicine, finance and other white-collar professions often earn more—sometimes significantly more—through self-employment than they would as employees. Two of the study’s 12 immigrant groups—South East Asians and Arabs—were found to benefit more from self-employment than from paid employment, if they worked in white-collar occupations.

Nakhaie’s findings of earning differences between different ethnic groups can be found in the November edition of the Canadian Review of Sociology.