Fact of the Week: Over 20 Percent of New Businesses in the United States Are Started by Immigrants
Source: Saheel A. Chodavadia, et al., “Immigrant Entrepreneurship: New Estimates and a Research Agenda,” National Bureau of Economic Research (NBER) working paper (Cambridge, Massachusetts: May 2024).
Commentary: According to a report by Saheel A. Chodavadia, et al., immigrants, whom make up about 14 to 15 percent of the U.S. population, have an outsized role in entrepreneurship, starting over 20 percent of new businesses in America. There is no specific measure of entrepreneurship or the immigration status of new business founders in the United States; however, the authors use two different measures to understand what percentage of startups are founded by immigrants. Using data from the Annual Business Survey (ABS) on the percentage of immigrant owners of firms in business for five years or fewer and data from the Longitudinal Employer-Household Dynamics (LEHD) database on the share of top earners in a firm, they find that immigrants account for at least 20 percent of entrepreneurs in America. This data does not differentiate between the founding of a high-growth startup company or a local, small business. Since 2003, immigrant entrepreneurship has increased by 66 percent, an effect driven by an increase in entrepreneurship in all states, not just a select few.
