Page 125 - IJPS-11-2

International Journal of
Population Studies Country choice for migrant entrepreneurship

Based on these figures, the education and training lower-skilled immigrants fill specific market gaps, allowing
provided to the workforce should align with each the former to focus on challenges requiring more than
country’s job requirements, and the success of this just additional labor. The expertise provided by highly
alignment significantly influences labor market outcomes, skilled immigrants drives the innovation process in the
productivity, and economic growth. However, when high-skilled tech industry, contributing significantly and
workers are overeducated or undereducated for their roles, positively to technological advancement. As for the lower-
a skill mismatch occurs, which incurs costs for individuals, skilled workers, they can complement the advancement
businesses, and society. Specifically, overqualified workers of technology and help accelerate the adoption of new
tend to experience wage reductions, lower job satisfaction, technologies (Karren, 2024).
and higher turnover rates compared with workers in
jobs that match their qualifications. Moreover, persistent 1.1. Literature review
qualification mismatches can result in long-term career The topic of IMIGRENT has gained increasing recognition
damage. According to the International Labor Office (ILO, among policymakers, stakeholders, and researchers (Ram
2013), immigrants, especially first- and second-generation et al., 2017; Solano et al., 2019; 2023). This growing interest
immigrants, are highly susceptible to skills mismatches. is driven by several factors, including the notable growth of
Although skills and qualifications play an important role the small business sector, highlighting the contributions of
in an immigrant’s economic and social integration, they immigrants and their natural entrepreneurial inclinations.
do not guarantee successful integration or labor market In OECD countries and the European Union (EU),
success. Rather, they represent an immigrant’s potential to approximately 12% of foreign-born migrants are self-
integrate and succeed in the host country’s job market by employed, with the percentage varying by country (OECD,
significantly influencing immigrants’ career paths and the 2018; Desiderio, 2014; Rath & Schutjens, 2016; Solano et al.,
types of jobs they can obtain (Organisation for Economic 2019; Taddei & Solano, 2020). However, data from Eurostat
Co-operation and Development [OECD], 2018). and the OECD indicate that migrant-run businesses

The evaluation and validation of skills and qualifications frequently underperform compared with those run by
affect migrants as well as refugees. Migrants can prepare locals in several metrics due to limited access to essential
for the qualification process in their destination country; infrastructure, networks, and credit opportunities. These
however, refugees often leave their home country without disparities restrict immigrants’ ability to fully engage in the
knowing their final destination. Moreover, they may be entrepreneurial environment. For instance, foreign-born
unable to bring their academic credentials and struggle entrepreneurs are more likely to manage microbusinesses
to access relevant institutions in their host country for and generate fewer jobs, especially in the formal economy.
document verification. Due to these challenges in verifying Furthermore, compared with local-owned businesses,
their qualifications, skills, and work experience, many businesses owned by immigrants are 27% less likely to
refugees and migrants face unemployment or jobs that survive in the first 5 years (OECD & European Union
do not fully utilize their abilities, with many highly skilled 2015; OECD, 2018; Taddei & Solano, 2020; UNCTAD,
immigrants forced into low-skilled, temporary, or poorly 2018; Eurostat, 2023).
paid positions. According to the European Commission, The reasons for which such a high number of immigrants
this situation is a loss not only for these migrants and choose to start businesses remain unclear. However,
refugees but also for the receiving societies and their previous studies have revealed that various factors in the host
economies. country, including labor market discrimination, selective
Interestingly, immigrants are often seen as highly immigration policies, and limited opportunities in areas
entrepreneurial, with higher rates of business ownership with high immigration, contribute to this trend. Recently,
compared with local-born individuals in developed less obvious factors driving immigrant entrepreneurship,
countries such as the United States, the United Kingdom, such as personality-based self-selection, have been
Canada, and Australia. Immigrant entrepreneurs have discussed. Specifically, immigrants are more inclined to
made significant contributions to the technology and become entrepreneurs than local residents because those
engineering sectors, especially in regions such as Silicon who decide to leave their home country to start a new life
Valley (Fairlie & Krashinsky, 2006; Karren, 2024; Kushida, elsewhere tend to have a greater willingness to take risks.
2024). Immigrant workers play a key role in determining Entrepreneurs generally face the risk of failure: slightly over
the adoption of technology. Highly skilled immigrants, 60% of startups in various OECD countries survive past
rd
such as scientists and engineers, drive innovation by their 3 year, with only 40% lasting beyond 7 years (Vandor,
developing new products and securing patents. Meanwhile, 2021). Moreover, immigrants frequently deal with issues

Volume 11 Issue 2 (2025) 119 https://doi.org/10.36922/ijps.4447