New evidence of firm creation by immigrants

The American Community Survey shows that an increasing share of entrepreneurs are immigrants, growing from 17% in 2001 to about 24% by 2015.  immigrant-owned firm accounted for 16% of all U.S. companies in 2007 and 18% in 2012. But if you look at new firm creation, immigrants, who comprise 18% of the workforce are proportionately ahead of natives.

First-generation immigrants account for 23.7% and 26.0% of new firms in 2007 and 2012.   In 2012, in California, 33.4% of all firms were immigrant founded and 41.9% of new firms.  The states in which at least 30% of new firms in 2012 were immigrant-founded are NJ, NY, CA, FL, DC, IL and MA.

Native-owned firms are more likely to have bank loans and credit, while immigrant-owned firms are more likely to rely on home equity loans and family loans. These patterns may signal a lower ability by immigrants to obtain bank credit.

Immigrant-owned firms have somewhat lower wages. They are less likely to provide health insurance and paid leave than non-immigrant firms.  They are more likely than non-immigrant firms to be in accommodations, healthcare, social services, and retail.

From Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012, Sari Pekkala Kerr, William R. Kerr, NBER April 2018



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