Do Immigrants Create More Companies Than Native-Born Citizens?

Immigration is a polarizing topic in this country. Some people believe that immigrants take jobs from native-born citizens, and that they have a negative impact on job prospects for locals. Evidence suggests that this is simply not true. According to a recent study that took a comprehensive look at the impact that immigrants have on the U.S. economy, researchers found that immigrants start more companies and create more jobs in the United States than individuals who were born here. Previous studies have also shown that the influx of immigrants has not resulted in lower local wages.

Unfortunately, it is unlikely that this will change the minds of those who are fierce opponents of immigration. If you are facing legal issues related to your status as an immigrant, do not hesitate to contact a skilled immigration lawyer who will protect your legal rights and recommend the best legal course of action.

What Are the Highlights of the Study?

According to a study published in the American Economic Review: Insights, titled “Immigration and Entrepreneurship in the United States,” immigrants are more likely to start new businesses and create more jobs than people who were born in the United States. In fact, after thoroughly analyzing registered businesses across the country, including tax records and U.S. Census Bureau information for over one million businesses that were established between 2005 and 2010, researchers found that immigrants are 80 percent more likely to establish new firms, and that those firms have an average of one percent more employees than companies that were started by native-born citizens. The study results show that immigration is actually associated with job growth, which is contrary to the widely-held perception that immigrants steal jobs and hurt the economy. The following are some key findings from the study:

  • While immigrants represent just over 14 percent of the U.S. population, they account for over 20 percent of the self-employed workforce, and 25 percent of startup founders.
  • Firms created by immigrants tend to be more innovative than those created by individuals who were born in the United States.
  • The higher quality of the firms translates into higher wages for employees.
  • Immigrants found more firms across a range of sizes, including small, medium-size and large firms. In addition, they do not focus only on growth-oriented startups or subsistence businesses. They create many different types of businesses that help create many high-quality, well-paying jobs.

According to Pierre Azoulay, economist at the MIT Sloan School of Management, and co-author of the study, when you consider immigrants relative to natives and to their share of the population, they started more companies, running from small startups to large corporations. While the study focused on facts about business creation, it does not explain why immigrants form more companies than native-born citizens. However, a logical explanation could be that immigrants who find it difficult to find a job working for someone else simply start their own business instead. Many immigrants who initially arrive in the U.S as students end up staying in the country and their own high-growth, high-tech startup firms. Ultimately, said Azoulay, the findings suggest that immigrants are actually “job creators” and not the “job takers” that anti-immigration supporters believe. 

Additional Study Finds Similar Results

The American Immigration Council recently released a report that highlights the essential role that immigrants play in the U.S. economy, and the need to encourage entrepreneurship and innovation in the immigrant community. The report looks at Fortune Magazine’s annual rankings of the 500 largest corporations in the United States. Researchers determine which companies were founded by immigrants or children of immigrants, and how these companies have contributed to the economy. The following are some of the main findings from the report:

  • Of the 500 companies on the list, 102 firms were founded by immigrants and 117 were founded by children of immigrants.
  • The Fortune 500 companies that were founded by immigrants or children of immigrants provide jobs for over 14.8 million people around the world.
  • Fortune 500 companies founded by immigrants or children of immigrants generate over $7 trillion in revenue, which is greater than the GDP of every country in the world outside the United States, with the exception of China.
  • Fortune 500 companies founded by immigrants drive close to 70 industry sectors across the U.S. economy.

Are Immigrants More Entrepreneurial Than Native-Born Business Owners?

There are a number of factors that may help answer this question. For example, the current immigration policy makes it very difficult to get a green card. Extremely skilled and qualified individuals are more likely to obtain a green card. In addition, researchers suggest that immigrants tend to have certain qualities that make them more likely to pack up and move to another country. People who have the courage, motivation and desire to do this are typically risk-takers who want to be in control of their future, and their family’s future.

When Is It Necessary to Contact an Immigration Lawyer?

Despite the evidence that immigrants are beneficial to the economy, it is unlikely that the study results are going to change the minds of those who support anti-immigration policies. Hard-working immigrants who are facing any of the following legal issues should contact a highly skilled immigration attorney:

  • You have questions about immigration benefits, including eligibility for a green card;
  • You have been notified that deportation proceedings are being started against you;
  • Your application for immigration has been refused or denied in the past;
  • You need emergency assistance with an important immigration matter;
  • You are having a difficult time obtaining a green card, citizenship or other immigration benefits; or
  • You need legal advice about starting a business, filling out the necessary paperwork and legal documents, and how to avoid challenges that immigrants are more likely to face.

Philadelphia Immigration Attorneys at Surin & Griffin, P.C. Advocate for Immigrant Business Owners

If you have an immigration issue that could have a negative impact on your business that you worked hard to build, do not hesitate to contact our skilled Philadelphia immigration attorneys at Surin & Griffin, P.C. Our legal team will work tirelessly to protect your legal rights and secure the best possible outcome for your case. To schedule a confidential consultation, call us today at 215-925-4435 or contact us online. Located in Philadelphia, we serve clients throughout Pennsylvania and nationwide.