Research Note: New Estimates of Immigrants' Self-employment From Linked Tax Records

Self-employment plays a crucial role in immigrants' economic assimilation. Previous studies examining immigrants' self-employment relied on estimates obtained from national surveys, which could contain measurement error. In this research note, we compare estimates of immigrant men's self-employment obtained from the Current Population Survey (CPS) with those from data linking respondents to their tax records. Our findings indicate that the CPS substantially underestimates the immigrant-native gap in self-employment. In some cases, the rate of self-employment for immigrants from administrative data is nearly double that obtained from survey data alone. Measurement error also appears to distort estimated differences in self-employment among immigrants by race, ethnicity, and national origin. The results highlight the greater importance of self-employment for the labor market integration of immigrant men than was previously known on the basis of survey data alone.