Publications
Publications
- 2016
- HBS Working Paper Series
Immigrant Entrepreneurs and the Social Safety Net
By: Gareth Olds
Abstract
This paper explores the role of public health insurance in small business ownership among immigrants, a group with high rates of entrepreneurship. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 created a five-year “waiting period” for legal immigrants to receive federal benefits. However, when the State Child Health Insurance Program was passed in the following year, 15 states chose to insure newly arrived immigrant children with local funds. Using a triple-difference identification strategy, I show that these policies made families with foreign-born members 21% less likely to have uninsured children compared to the pre-policy baseline. These households were also 20% more likely to be self-employed and 28% more likely to own an incorporated business. The increase operates mainly through increases in firm birth rates but survival rates are also higher. The increase in firm ownership comes mostly from families whose children were already insured, suggesting public health insurance increases business ownership by reducing the risks of losing coverage.
Keywords
Citation
Olds, Gareth. "Immigrant Entrepreneurs and the Social Safety Net." Harvard Business School Working Paper, No. 16-142, June 2016.