Immigrant entepreneurs from the former USSR in Israel: Not the traditional enclave economy

Based on data from the 1995 census and on a literature review, we examine whether immigrants from the former USSR in Israel tend to gravitate into self-employment, and whether the characteristics of these immigrant entrepreneurs resemble those in prominent ethnic economies elsewhere. Despite expectations, the propensity of new immigrants from the former USSR to engage in business was found to be low. These immigrants lacked developed ethnic networks and relevant experience in marketing. The relatively few who turned to self-employment did not concentrate particularly in niches typical of immigrant entrepreneurs around the globe, being either relatively uninterested in entering traditional ethnic entrepreneurial niches, or unable to penetrate substantially into niches occupied by other Jewish groups or by Arabs. Immigrant entrepreneurs thus concentrated in niches at two extremes of the occupational ladder: those based on high levels of education at the top and the non-skilled ones at the bottom. The more entrepreneurial Arab minority group, hindered by inferior educational standing and discrimination, gravitated more to traditional ethnic entrepreneurial niches, although being constrained by geographical concentration in non-metropolitan localities. It is doubtful whether informal practices are a major issue among immigrant entrepreneurs in Israel, since such practices are prevalent among other groups. Clearer norms for the operation of businesses could even make it easier for immigrants to enter the small business economy, as long as these norms are not aimed at restricting competition.