Latinos and immigrants start companies at higher rates than white non-Latinos, while blacks increasingly are jumping into business ownership...

Share story

Latinos and immigrants start companies at higher rates than white non-Latinos, while blacks increasingly are jumping into business ownership, a new study finds.

Among other findings of the Kauffman Index of Entrepreneurial Activity: 550,000 businesses launch each month nationally — an average of 0.36 percent of the adult population. That rate has remained roughly unchanged over the study period, 1996 to 2004.

This is the first study to measure business starts among all adults in the United States, including those who are self-employed, said its author, Robert Fairlie, an economics professor at the University of California, Santa Cruz.

The data, issued by the Ewing Marion Kauffman Foundation of Kansas City, Mo., give a broader look into microbusinesses than U.S. Census figures capture.

Most Read Stories

Unlimited Digital Access. $1 for 4 weeks.

“If [this] data are correct, the volatility of new businesses is much higher than we anticipated. That means we are losing thousands of businesses a year or that there is a lot larger underground economy” than estimated, Jerome Katz said yesterday. Katz is entrepreneurship professor at St. Louis University.

Two surprising results emerged from the study, Fairlie said. The number of Latinos who started businesses jumped to 0.48 percent of the adult population last year from 0.38 percent in 1996 — greater than the 0.39 percent rate for white non-Latinos. And immigrants have substantially higher entrepreneurship rates than U.S. natives — 0.46 percent vs. 0.35 percent.

The study also showed that business-start rates are lower for African Americans than other racial or ethnic groups. But the data show that blacks increasingly are becoming entrepreneurs — rising to 0.35 percent last year from 0.29 percent in 1996.

“It was good news; it hadn’t gone up in a while,” Fairlie said.