Immigration and Baumolian Entrepreneurship in the United States

We investigate immigration and entrepreneurship—productive and unproductive—in the United States. Previous studies of this relationship focus on specific immigrant populations and single-variable definitions of entrepreneurship. We focus on all migrants, examining authorized and unauthorized populations. Additionally, we explore multiple measures of entrepreneurship, capturing wealth-generating and redistributive behavior. For most measures of productive entrepreneurship, our results show positive and statistically significant correlations with authorized immigration. Investigating unproductive entrepreneurship yields statistically significant results, but the signs of our coefficients depend on the proxy used. This all suggests that the institutional environment to which migrants move rewards productive entrepreneurship but has a mixed effect toward unproductive entrepreneurship.