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Immigrants are 80% more likely to start businesses in the U.S. than native-born citizens, study finds

Harlen Lara gives a haircut to a patron at Los Magicos barbershop in Dorchester. (Jesse Costa/WBUR)
Harlen Lara gives a haircut to a patron at Los Magicos barbershop in Dorchester. (Jesse Costa/WBUR)

Immigrants are 80% more likely to start a business than people born in the U.S., according to a new study co-authored by an MIT researcher in American Economic Review: Insights.

The new research found that per capita, foreign-born residents started more businesses of all sizes. The study's results are in keeping with findings in previous research.

"[Immigrants] create more firms pretty much in every size bucket," said Pierre Azoulay, co-author of the study and an economist at MIT Sloan School of Management. "They create more small firms, they create more medium sized firms. They create more firms that will grow up to be very large."

Researchers looked at more than a million businesses using data from both the U.S. census and Fortune 500 companies. Per capita, immigrant-owned firms hired on average 1% more employees than those started by native-born citizens.

Azoulay said the goal of the research is not to make specific policy recommendations, but instead provide unequivocal data.

"I feel like people are totally entitled to have their opinions about immigration, but they're not necessarily entitled to have their own facts," Azoulay said.

Immigration has been dropping since 2016 because of COVID-19 and, before that, the restrictive policies of the Trump administration.

With employers currently struggling to fill millions of open positions, Azoulay said he worries about the economic consequences of fewer immigrants.

"The U.S. is shooting itself in the foot by raising so many hurdles for people, particularly people with high skill to come to this country,he said.

Related:

Yasmin Amer Twitter Reporter
Yasmin Amer is a business reporter for WBUR.

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