Testing the discrimination hypothesis for female self employment migrants in the UK

We propose a comparative analysis of migrants in both sectors (employment and self-employment) exploring the gender earning discrimination hypothesis. Using individual micro data from the British Household Panel Survey (1991-2008), we estimate wage equations for employed and self-employed migrants and find that, contrary to our expectations, the average earnings gap in self-employment is almost double compared to the employment sector. This finding reveals that self-employment leads migrant women to an even more precarious and vulnerable position in terms of financial means and economic power. In addition, we explore the determinants of these gaps using the econometric procedure of the decomposition (the Blinder-Oaxaca) model. We find that the variables that explain the gender gap in the employment sector are mostly observable individual characteristics like education or migration duration, confirming the human capital theory, whereas in the self-employment sector, this gap is more due to unobservable individual characteristics. Through our work, we show that including the gender perspective into migration analysis has implications for policy makers enabling them to evaluate these processes from a more social (rather than individualistic) dimension.