Self-Employment by Foreigners in Germany: Income Effects and Implications for Entrepreneurship Support Policies

The paper uses data from the German Socio-Economic Panel (SOEP) to analyze entrepreneurial activities by foreigners in Germany. The results from our regression analysis are the following: First, foreigners in self-employment are found to earn more than foreigners in a regular employment position. Second, foreigners seem to gain more from self-employment compared to German entrepreneurs. Also, the earnings increase from self-employment is larger for foreigners than it is for Germans. The findings are discussed from a policy and an entrepreneurship education perspective.