In this paper we study labor market transitions among self-employment, gainful employment, and unemployment across the business cycle comparing the performance of migrants and natives and controlling for individual characteristics. The Markov chain specification we use is an appropriate...

Economically active people are either in gainful employment, are unemployed or self-employed. We are interested in the dynamics of the transitions between these states across the business cycle. It is generally perceived that employment or self-employment are absorbing states. However,...