BUSINESSWEEK ONLINE : DECEMBER 25, 2000 ISSUE
ECONOMIC TRENDS

Immigrants and Entrepreneurs
Newcomers crowd some natives out

Have the millions of immigrants who have entered the U.S. in recent decades affected the self-employment prospects of native-born Americans? Since studies show that immigrants are more likely to set up their own businesses than natives, you might think so. Yet a 1998 study by Robert Fairlie of the University of California at Santa Cruz and Bruce D. Meyer of Northwestern University found only a negligible impact on black self-employment.

Now the two economists have looked at the effect on the self-employment of whites and other non-black Americans and found it to be substantial. Using 1980 and 1990 census data, they estimate that every 100 self-employed immigrants have ''displaced'' from 35 to 85 self-employed native-born men and 9 to 19 self-employed native women.

On a positive note, the authors found no evidence that immigration hurts native reported self-employment earnings. And they note that job displacement appears to have taken the form of dissuading natives from starting new businesses rather than forcing them to shut down. That's because overall U.S. entrepreneurship grew rapidly. Despite growing numbers of self-employed immigrants, such businesses established by U.S-born citizens increased by over 1.8 million between 1980 and 1990.

By GENE KORETZ

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