In which sectors are self-employed immigrants more prevalent, compared to the self-employed Canadian-born? – Foundational Data #10

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In Blog #8 and Blog #9, we showed the number and the percent of self-employed immigrants in each industry sector within each economic region. Here we ask whether self-employed immigrants are more prevalent in a given industry sector, compared to the self-employed businesses operated by the self-employed Canadian-born.

Key findings

  • For Ontario as a whole, self-employed immigrants are 2.2 times more likely to be operating enterprises in transportation and in food services, compared to self-employed Canadian-born.
  • In Ontario, self-employed immigrants are especially under-represented in agriculture and in arts, entertainment and recreation services, compared to the self-employed Canadian-born.

Amish Horse And CarriageIn more detail

For sectors where we find a higher share of self-employed immigrants, compared to the self-employed Canadian-born (which generates a location quotient greater than 1), we may conclude that self-employed immigrants are relatively more competitive in this sector — i.e. they have a higher share of their businesses in this sector compared to the self-employed Canadian-born. Similarly, for sectors with a lower share of self-employed immigrants, compared to the self-employed Canadian-born (i.e. with a location quotient less than 1), we may conclude that self-employed immigrants are relatively less competitive in this sector – i.e. they have a lower share of their businesses in this sector compared to the self-employed Canadian-born.

An alternative vocabulary for interpreting a location quotient is to note that a location quotient greater than 1 shows relative specialization (compared to the reference group). A location quotient less than 1 indicates that self-employed immigrants are relatively under-represented in this sector and there may be opportunities for more self-employed immigrants to establish a business in this sector.

(For further discussion of location quotient analysis, please refer to Foundational Data #7 blog post.) Note that alternative reference groups might be chosen. Here, we have chosen to compare self-employed immigrants in each economic region to the self-employed Canadian-born in each region. Thus, given the economic region, we are asking whether self-employed immigrants have a higher or lower share of their businesses in each industry sector. Alternatively, we might have asked, in a given economic region, whether the businesses of self-employed immigrants were more or less intensive in a given industry sector, compared to the distribution of immigrant self-employed business across Ontario as a whole. A comparison of each economic region for self-employed immigrants across all of Ontario would provide an answer to a different question – in which economic region is the intensity of immigrant self-employed business greater or less than the overall-Ontario pattern of self-employed immigrant for each industry sector. For Ontario as a whole, self-employed immigrants are more likely to be operating enterprises in transportation[1] and in food services, compared to self-employed Canadian-born (Table 18). FD Blog #10 Table 18 In fact, each has a location quotient of 2.2 (Table 19) which indicates that self-employed immigrants in Ontario are 2.2 times more likely to be operating a business in these sectors than the self-employed Canadian-born individuals in Ontario[2]. FD Blog #10 Table 19The food services sector has the highest or 2nd highest location quotient in 10 of the 11 economic regions in 2011. VCMC Transportation has the highest or 2nd highest location quotient in 4 economic regions: the big city economic regions of Ottawa, Toronto, Kitchener-Waterloo-Barrie and Hamilton-Niagara Peninsula. In other words, self-employed immigrants in these regions are relatively more intensive in transportation enterprises and food services enterprises, compared to the self-employed Canadian-born individuals in the economic region. At the Ontario level, self-employed immigrants in agriculture and in arts, entertainment and recreation services have the lowest location quotients. In these sectors, self-employed immigrants are relatively under-represented, compared to the self-employed Canadian-born. As noted above, the relatively small share (i.e. a relatively small location quotient) may be interpreted as an indication of an opportunity for self-employed immigrants to increase their presence in these sectors. However, there are a number of different sectors with low location quotients when viewed across Ontario’s economic regions.

 

[1] The transportation and warehousing sector include services such as air transport, water transport, freight trucking, bus transport, taxis, towing services, courier services and warehousing and storage services.

[2] The calculation for transportation is that, in 2011, 7% of self-employed Ontario immigrants were operating a transportation business (Table 21) compared to 3.3% (data not shown) of self-employed Canadian-born in Ontario (where 7.4% divided by 3.3% generates a location quotient of 2.2). Similarly, 6% of self-employment Ontario immigrants were operating a food service business (Table 21) compared to 2.6% of self-employed Canadian-born (where 5.8% divided by 2.6% generates a location quotient of 2.2).

Discussion questions

  1. Why are self-employed immigrants highly concentrated in transportation and in food services?
  2. What barriers might prevent immigrants from pursuing self-employment in agriculture?

Sarah V Wayland

Sarah Wayland, Principal Investigator and Ray Bollman

Tables created by Ray Bollman

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