Latino Business Ownership: Contributions and Barriers for U.S.-Born and Immigrant Latino Entrepreneurs
Robert W. Fairlie, Ph.D., January 2018
Large differences in business ownership rates and income exist between minority groups and non-minorities. Those differences have persisted over time and may be an inhibitor of economic growth. This study evaluates business ownership among native-born and immigrant Latino men and women and compares them to non-minorities. It uses statistical techniques to understand how much of these disparities can be attributed to differing population characteristics, like age, wealth and educational attainment.
The data clearly show the large impact Latino business owners have on the economy. Roughly 541,000 business owners are U.S.-born Latinos, with an additional 1.2 million immigrant Latino business owners.
Combined, the study shows Latino business owners earning $61.3 billion in business income. However, the report also shows the large disparities in both Latino self-employment rates and business income as compared to non-minorities. For example, 3.5 percent of U.S.-born Latinos are self-employed compared to 6.8 percent of non-Latino whites. In business income, both immigrant Latinos and U.S.-born Latinos earn less than non-Latino whites, $31,000, $47,400 and $66,600 respectively.
The report analyzes population characteristics like wealth, education, and age to see if these factors explain some of the business ownership and income differences experienced by Latinos. Due to the differences between the genders and migration status in business ownership and income, all of these groups are compared separately with their non-minority counterpart. For example, U.S.-born male Latinos are compared to non-Latino white males. Therefore the analysis compares four groups of Latino business owners to non-Latino white owners: U.S.-born males, U.S.-born females, immigrant males and immigrant females.