Why Immigration Reform Isn’t the Answer to America’s Declining Startup Rate

The rate at which Americans create new companies has fallen by nearly half over the past thirty-five years — from 2.56 new businesses with employees per thousand people in 1977 to 1.31 in 2012 — data recently released by the Census Bureau reveals. That alarming trend has policy makers scurrying to identify the causes of the decline, and to reverse it.

Some policy researchers affiliated with the Ewing Marion Kauffman Foundation, a non-profit organization devoted to the study of entrepreneurship, have proposed immigration reform as the answer. Dane Stangler, the Foundation’s Vice President of Research and Policy, has claimed (PDF) that the country needs to bring in more foreign-born entrepreneurs to combat the decline in the nation’s start-up rate. Jonathan Ortmans, a Senior Fellow at the Foundation, told the Washington Post that “immigration reforms represent one of the most powerful possible moves lawmakers could take to spur new business formation.”

Why Immigration Reform Isn’t the Answer to America’s Declining Startup Rate