Cold temperatures linked to immigrant entrepreneurship

Immigrants in the United States have higher self-employment rates than native-born Americans. However, a newly published Iowa State University study found immigrant self-employment rates vary considerably across areas of the country.

Areas of the country with colder winter temperatures have especially low self-employment rates among their immigrant populations compared to warmer areas. The relationship between winter temperature and immigrant self-employment persists after controlling for numerous individual and local area characteristics.

"If you go from a 10-degree mean temperature in a state like Minnesota to a 60-degree mean temperature in Florida, the data shows more than double the percent of immigrants in the area who have their own business," said John Winters, an economics professor at Iowa State.

"A lot of immigrants have never lived in a cold area. If you're uncertain about your ability to acclimate, you may be averse to starting a business in an unfamiliar setting."

The paper is published in the journal Economic Development Quarterly.

More information:
Jun Yeong Lee et al, Too Cold to Venture There? January Temperature and Immigrant Self-Employment Across the United States, Economic Development Quarterly (2024). DOI: 10.1177/08912424241271142

Provided by Iowa State University