Report: Latinos, immigrants more likely to start businesses

RNC Communications - April 22, 2013

As the Senate Gang of Eight rolls out its immigration bill, a new report is highlighting the economic benefits that come from bringing more foreign-born into the United States.

According to a new report, the Kaufman Index of Entrepreneurial Activity released by the Kaufman Foundation, immigrants were twice as likely to start businesses as native-born Americans in 2012. The share of immigrant entrepreneurs rose to 27.1 percent in 2012 compared to 13.7 percent in 1996. The share of native-born entrepreneurs dropped from 86.3 percent in 1996 to 72.9 percent in 2012. But foreign-born entrepreneurs weren’t the only ones seeing a marked increase in entrepreneur shares of the population.  The number of new Latino entrepreneurs has also nearly doubled, from 10.5 percent to 19.5 percent since 1996.

Lead researcher Robert Fairlie says that not only is the Latino share of entrepreneurs increasing over time, but it is outpacing other ethnic groups as well.

“The Latino rate is higher than the rate for African-Americans, Asians, whites. Of the four major racial ethnic groups, Latinos have the highest rate,” Fairlie says. “That’s a relatively new pattern because that wasn’t the case fifteen years ago.”

Although the study did not seek to explain the reason for the high number of Latinos and immigrants who start businesses, Fairlie suggested natural population patterns may be behind the growth. He says that having more Latinos logically leads to more Latino entrepreneurs.

“Latino patterns are following the patterns of the immigrant population,” Fairlie says. “It’s population growth and the fact that Latinos are becoming an increasing share of the nation.”

He also attributes the bigger share of immigrant entrepreneurs to the idea that immigrants are more entrepreneurial by nature.

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