Study finds entrepreneurship on the decline in the U.S. but holds out hope that immigrants may reverse this trend


In 1910, more than one-third of American workers were self-employed. In 2020, this figure was just nine percent. This report from the American Enterprise Institute finds that although the desire to be an entrepreneur still exists, economically beneficial entrepreneurship has declined in the United States. Data suggests, on both the supply and demand side, that aspiring entrepreneurs are facing many challenges in achieving success. Despite the fact that large numbers of Americans were engaged in freelance or entrepreneurial work, much of this work was not full-time in nature; nor did it provide a primary income. The report documents that most of the growth in freelancing occurred in fields with little chance of evolving into larger business or entrepreneurial endeavors. Demographic factors are also working against entrepreneurs today, including low birth rates and an aging population resulting in diminished labor force growth. For example, an older population leads to “consumer inertia,” or a loyalty to existing companies and products. Although policymakers at local, state and federal levels have some tools to counter these larger demographic trends, the author concludes that the most promising solution is to “encourage more immigration.” (Georgia Whitaker for The Immigrant Learning Center’s Public Education Institute)

Being Their Own Boss: A Review of American Demography and Entrepreneurship,
American Enterprise Institute, February 2020, 14 pp.
Author: Lyman Stone