Pierre Azoulay

Summary of Study

Bottom line: Immigrants not only expand labor supply as workers but also expand labor demand as founders of firms. Immigrants act more as “job creators” than “job takers” and play outsized roles in U.S. high-growth entrepreneurship. Immigrants exhibit an 80% higher entrance rate into entrepreneurship than the native-born and start more firms of every size. 

Immigrants increase the labor supply but do not hurt native-born workers. Studies of immigration shocks—including the Mariel Boatlift and others—often do not find negative effects on local wages. Studies of mass migration to the United States have found substantial and persistent gains in per-capita income in regions that experience greater immigration. 

Reflecting existing research, this study finds that immigrants start firms at higher rates than native-born individuals.  Immigrants play relatively large roles as employers rather than employees, compared to U.S.-born individuals. Immigrants, therefore, substantially expand labor demand, raising wages. 

The rate of entrepreneurship looking at the 2005-2010 period shows that 0.83% of immigrants in the workforce start a firm over this period, compared to 0.46% of native-born individuals in the workforce. 

Immigrants are disproportionately likely to account for U.S. patents and hold STEM degrees. Immigrants have started firms that grow to employ large numbers of people, with large effects on the economy.

At each firm size, the frequency of immigrant-founded firms per immigrant in the population tends to be larger than the frequency of native founded firms per native-born person in the population.

Greater immigrant entrepreneurship occurs among new firms in the economy as well as firms founded in earlier time periods. This immigrant entrepreneurship advantage holds when looking at administrative data, surveys of businesses, and the Fortune 500.

Read the full study HERE

Feature Charticle

Immigrant and Native-Born Entrepreneurship: Firm Size Distributions using Administrative Data 

NBER

Findings:

  • At each firm size, the frequency of immigrant-founded firms per immigrant in the population tends to be larger than the frequency of native-founded firms per native-born person in the population.
  • The rate of entrepreneurship looking at the 2005-2010 period shows that 0.83% of immigrants in the workforce start a firm over this period, compared to 0.46% of native-born individuals in the workforce, meaning immigrants exhibit an 80% higher entrance rate into entrepreneurship. 
  • Greater immigrant entrepreneurship occurs in firms of all sizes, when considering new or old firms, and when studying administrative, survey, or Fortune 500 data. 

Read the full study HERE