NCPA - National Center for Policy Analysis

Import Job Creators

September 8, 2010

A common refrain is that immigrants take away our jobs.  The appropriate response to that kind of talk is, let's come up with a way to get immigrants to create jobs instead.  Here's one way: a job creator's visa, says Robert E. Litan, vice president for research and policy at the Kauffman Foundation and a senior fellow in economic studies at the Brookings Institution.

The program could work as follows.  Immigrant entrepreneurs get a one-year visa enabling them to launch a business and search for employees.  Once they hire at least one nonfamily member -- who must be an American citizen -- they can stay for five years.  If they hire more than 10 U.S. workers, they get their green card.  Such a scheme would exploit two phenomena in the job market, says Litan.

  • First, nearly all new jobs are created by relatively new companies.  A recent study at the Kauffman Foundation found that young companies (those less than one year old) create 3 million American jobs a year, while older firms destroy a million.
  • Second, immigrants are far more likely -- 30 percent more inclined, by some estimates -- to form new companies than are native-born citizens.  Ebay, Google and PayPal were all cofounded by immigrants; AT&T, U.S. Steel and Procter & Gamble were also created by foreigners searching for opportunity in the United States.

Today there are 1 million highly skilled immigrants in this country legally, if only temporarily, on H-1B visas.  Another 125,000 foreigners graduate from our universities each year.  If only 10 percent of them launched businesses under this program, we would have 110,000 new American jobs right off the bat.  Immigrant founders would then have very strong incentives to expand their businesses in the United States so they could stay here, says Litan.

Source:  Robert E. Litan, "Import Job Creators," Forbes Magazine, September 13, 2010.

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