Immigrants started new businesses last year at more than double the rate of U.S.-born citizens

According to a recent analysis, immigrants launched new businesses last year at a rate more than double that of U.S.-born citizens.

This trend is significant because entrepreneurship can lead to financial success for immigrants, especially those without legal work status, while also contributing to the nation's economic growth.

Despite these contributions, anti-immigrant rhetoric during the U.S. election season often portrays immigrants as a burden on resources.

The analysis, conducted by economist and UCLA professor Robert Fairlie using federal labor statistics and census data, found that immigrants had the highest rate of new business creation among U.S. adults. The Wall Street Journal first reported on the study.

In 2023, approximately 670 out of 100,000 immigrants, or 0.67% of immigrants, started a new business each month. This rate was more than double the overall average for the adult population, which stood at 0.35%. The data on immigrant entrepreneurship did not include breakdowns by race or ethnicity.

Latinos also demonstrated significantly higher rates of new business ownership compared to other racial or ethnic groups. The rate was 0.6% for Latinos, 0.34% for Black Americans, 0.31% for Asian Americans, and 0.28% for white Americans.

Gustavo Suarez, the founder and CEO of Trez, a payroll platform focused on U.S. Latino businesses, noted that many immigrants start businesses out of necessity but also because of an inherent entrepreneurial spirit. He explained that immigrants often come to the U.S. with a mindset of wanting to improve their lives and create impact, which aligns with the definition of an entrepreneur.

Despite the entrepreneurial drive among immigrants and communities of color, accessing capital has been a challenge. However, federally-backed loans to Latino-owned small businesses reached a record $3 billion in 2023, doubling in just two years, according to the U.S. Small Business Administration. Latino-owned businesses of all sizes contribute $800 billion to the U.S. economy annually, according to the latest Stanford Latino Entrepreneurship report.

The report also highlighted that the median growth rate for Latino businesses from 2019 to 2022 was 25%, significantly higher than the 9% growth rate for white non-Hispanic-owned businesses.