NCPA - National Center for Policy Analysis

Fewer Immigrants Starting Businesses

January 12, 2000

For decades, the proportion of immigrants to the U.S. who started their own businesses exceeded entrepreneurship rates of U.S.-born citizens. But a new study from the Center for Immigration Studies -- funded by the Federation for American Immigration Reform -- shows that native-born Americans have surpassed immigrants in entrepreneurship.

  • Back in 1960, some 13.8 percent of immigrants ran their own businesses, compared to 9.6 percent of native-born Americans.
  • But by 1997, 11.3 percent of immigrants were entrepreneurs, versus 11.8 percent of native-born Americans.
  • Nearly one-third of Korean immigrants founded their own businesses, the highest rate of any immigrant group -- while immigrants from Colombia who start their own businesses are the most prosperous, making an average of $40,267 a year.
  • Immigrants from Haiti are the least likely of major immigrant groups to start their own businesses -- with an entrepreneurship rate of just 3 percent.

Experts say that three factors are behind the declining trend. The longer an immigrant is in the country, the more likely he is to start his own businesses. But since immigration has steadily increased since 1960, a greater number are now newer to the country.

Immigrants in recent years are less educated than native-born Americans. So they are less likely to start their own firms.

Finally, changes in immigration law since the 1960s have resulted in more immigrants from countries with less of an entrepreneurial tradition.

Source: Paulette Thomas, "Immigrant Entrepreneurs Slip From Top," Wall Street Journal, January 12, 2000.

 

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