A Curse or A Blessing

“With almost 23 million people unemployed and another 91million inactive in the labor market of Europe within the second quarter of 2015, promoting entrepreneurship and self-employment has become very important on the agenda of European national and regional policymakers because it is believed to have a strong potential to create jobs, strengthen the EU’s innovation capacity and give unemployed and disadvantaged people an opportunity to fully participate in society and the economy” (European Commission, 2016 pg 41). Policymakers and researchers therfore trust self-employment is an option to unemployment and a solution to poverty (Bogan and Darity, 2008). Self-employment has recently become an important topic in immigration studies. It has become an important avenue for the immigrant's social mobility as they face disadvantages in their host countries (Raijman, 2001). Hence, it performs an important role in the process of immigrant adjustment and integration in their host countries, making it worth studying (Le, 1999). Whiles, there have been substantial studies conducted on the changing relationship between self-employment in general and unemployment in OECD countries, few studies have been done in the context of most European Union countries. Also, little or no studies exist specifically on immigrant self-employed and their possible influence on the unemployment rate of their host countries. This studies objective is to, therefore, explain the impact of self-employment on unemployment and explore the influence of immigrant self-employment on unemployment in EU 28 member countries. The research is explanatory in nature and uses quantitative research approach and basis its secondary data from Eurostat, World Bank’s World Development Indicators and UN Population Division and ILOSTAT. Two types of statistical analytical software tools, Stata and Excel were used for the analysis of existing data on self-employment (both immigrant and native) and unemployment within the period 2007-2015 for all EU 28 member countries. In the process of addressing the nature of the relationship between self-employment and unemployment and also explore the possibility of the immigrant self-employed reducing unemployment through their indirect job creation, a fixed effect regression model in Stata was estimated. From the analysis, the study identifies a negative significant relationship between self-employment and unemployment in EU 28 member countries. However, the self-employed immigrants, unlike the natives, were less likely to reduce the unemployment rate in their EU 28 host countries considering their low representation in the sector. Nevertheless, it was also confirmed from the analysis that an increase in the immigrant and native employers (who hire others) unlike own account workers (in the self-employment sector) are likely to reduce the unemployment rate since they do not only create jobs for themselves but also create employment opportunities for other unemployed persons. The study, therefore, concludes that indeed self-employment is a possible alternative to unemployment in EU 28 member countries of which the immigrant self-employed have a role to play as more of them dive into the sector due to the discriminations they go through in the labor market. Irrespective of this, self-employment can only be sustainable if governments of The Impact of Immigrant Self-employment on the Labour Market of Europe iv the EU 28 member countries could implement policies that create opportunities for all regardless their immigration status to startup their own business and expose them to a conducive environment that enables them to operate smoothly and make the self-employment sector more attractive.