8 Evidence-grounded Insights on Immigration and Business
In June 2024, Wharton Global Youth welcomed Wharton’s Exequiel “Zeke” Hernandez to our cross-program lecture series for high school students studying with us on campus.
Dr. Hernandez joined us a week after the publication of his first book, The Truth About Immigration: Why Successful Societies Welcome Newcomers. The linkage between immigration and economic growth has crucial implications for immigration policy, and Professor Hernandez’s research, gathered in the past 20 years, suggests that immigrants are essential for economically prosperous and socially vibrant nations.
Below are eight highlights from Professor Hernandez’s conversation with Wharton Global Youth on the immigrant economy:
1️⃣ Few topics are more controversial than immigration. In the U.S., as well as just about every other country, debate rages about whether immigrants are good or bad for us. And every country around the world with a growing economy is attracting a lot of immigrants.
2️⃣ People believe two stories about immigrants: they are villains because they steal our jobs, undermine our culture and create safety problems. And, immigrants are victims: the poor, huddled masses who need our help. “When you look at data, when you look at hard evidence, it tells us that immigrants are neither villains nor victims,” noted Dr. Hernandez. “Instead, we can be factually optimistic.”
3️⃣ Immigrants bring investment, talent, innovation, jobs, and pay taxes, which helps keep the economy vibrant.
4️⃣ Pollo Campero is a case study in how the largest fast food chain in Guatemala made an investment in the U.S., opening its first restaurant in Los Angeles in 2002. The company recently opened its 100th U.S. restaurant in Miami, Florida.
5️⃣ Immigrant-driven investments and businesses create thousands of jobs, many of which go to native-born Americans, not just immigrants. “By a very conservative estimate, Pollo Campero has created more than 5,000 jobs,” noted Hernandez. “That’s a conservative estimate because we’re not counting the indirect jobs it supports for its suppliers and distributors. Most of the direct jobs don’t go to immigrants. They go to native people. These investments are very important for communities to stay alive.”
6️⃣ More than 50% of people with PhDs in artificial intelligence in the U.S. are foreign-born, underscoring the critical role of immigrant talent in driving innovation.
7️⃣ Immigrant-founded companies like Zoom and OpenAI have made important contributions to the tech industry. “If we look at OpenAI, which is the creator of ChatGPT, the chief technology officer is Mira Murati, an Albanian engineer,” added Dr. Hernandez.
8️⃣ Immigrants are 80% more likely than natives to start businesses. They account for a quarter of all businesses and a half of all businesses that reach unicorn status, which means it has a valuation of $1 billion or more. “Countries get new ideas and new innovations because of immigrants,” noted Dr. Hernandez.
What does immigration have to do with business? “If you’re going to run a business and you need talent, much of the talent you’re going to need is foreign-born,” said Professor Hernandez. “It’s not just the quantity of talent and ideas, but the variety of talent and ideas” that adds value to the economy.
Conversation Starters
Professor Zeke Hernandez talks often about the need for hard evidence in the conversation around the immigrant economy. Why do you think this is important? What are some examples of his research that help contribute data to the discussion?
What questions would you like to ask Dr. Hernandez about the immigrant economy? Drop them in the comment section of this article.
Dr. Hernandez says that countries get new ideas and innovations because of immigrants. Do you agree with this statement? Why or why not? What other insights in this article made you think differently about the immigrant economy?
Thank you!!
I believe that immigrants are essential for an economy to grow. More businesses started will create more jobs and hence boost the economy. However, immigration should be limited to the point that it doesn’t outperform locals, as this becomes a disadvantage for the natives. quantity is key.
It is truly an interesting point, but doesn’t limiting immigration to protect locals risk stagnation, as well as overlook the fact that economies usually thrive on competition? I am convinced that instead of creating a quantity cap, we should rather focus on creating equitable opportunities, which will further drive innovation and ensure prosperity for all.
I believe this article implies how imprudent, restrictive immigration policies have created the narrative around immigrants in the United States, especially the current status under the Trump administration. Former President Trump often justified policies like the travel ban and the zero-tolerance policy at the border by claiming that immigrants threaten public safety or steal jobs from American citizens. Many might think that most of the jobs in the U.S. go to immigrants initially. However, this article demonstrates that immigrants actually contribute significantly to the U.S, economy by creating thousands of jobs for all, as proven by the success of Pollo Compero and the leadership of immigrants in OpenAI. For me, I dream to study business in the United States and start my own company there. Reading this article gives me genuine hope, but I also acknowledge the truth that talented immigrants are seen as liabilities, as an international student currently studying in South Korea,. I was kind of frustrated that they were solely discouraged by fear-based narratives that were outdated from now, which contradicted the actual evidence just like this article.. Now, it’s time to move away and reframe how we view immigration as one of the fundamentals of innovation and entrepreneurship. Like many others, I want the chance to build something meaningful in the U.S. in collaboration!
That’s a very valid point, and I also think that immigration can have a positive impact.
But how about the effects that numbers don’t always capture — like its cultural influence?
Would it be possible for Channey to share your thoughts on the potential cultural domination that might happen with excessive immigration? I’m also curious about your perspective on the potential meltdown of social services when one country takes in more people than its systems is capable of.
Although immigrants positively influence the host countries by creating new jobs and increasing cultural diversity, I believe that consequences would often offset the benefits.
To begin with, immigrants can potentially be a threat to the cultural identity of receiving countries. There’s no doubt that foreigners bring different cultures and help create a more diverse society. However, some countries in this world value their own culture, as in Japan who emphasizes on its traditional practices and culture. I spent my childhood in Tokyo, and realized that we have a unique culture very distinct from others. From the way we greet to the food that we eat, everything serves as my cultural identity when I went abroad. They were so important to me as they are something that identifies me as Japanese. This, I believe, is significant and should not be replaced by other cultures.
Secondly, if overly accepted, immigrants could cause some economic issues in the host countries. For one, too much immigration can cause some surges in housing costs. Canada has experienced many rises in housing demand, which often results in a housing crisis. In addition, social services such as health care and education might face some challenges as more immigrants come into the receiving country; some might lose the access to those services because of an increased immigration.
In conclusion, I think that immigration could benefit the host countries as long as its downside is prevented. To a certain extent, opening up the economy to immigrants is beneficial because it increases job opportunities and the creation of inclusive communities. However, it is also important to note that cultural identities and public services must be protected for locals.
As you mentioned, foreigners bring diverse mindsets and backgrounds. Immigrants often show this by starting businesses, arriving with plans, and having sacrificed much. This builds higher risk tolerance. They’ve seen worse conditions in their home countries compared to the U.S., motivating them to improve things here. As someone who’ll be an immigrant in college, I can relate—I love America, want to contribute to its economy, and I believe many immigrants share this mindset.
I agree that planned and controlled immigration is key to balancing benefits with potential downsides. Your point about cultural identity, like Japan’s traditions, is valid, but many immigrants, from my experience, respect and embrace American culture. Look at immigrants like Sergey Brin (Google), Arnold Schwarzenegger (actor, former California Governor), and Elon Musk (Tesla, SpaceX)—they’re just examples; the list of successful immigrant Americans is long. You also raised economic concerns like housing costs. Immigrants can help here too, addressing the U.S. fertility rate, below 2.0 and boost the workforce.
We shouldn’t focus on stereotypes or myths. As Dr. Hernandez suggests, we should rely instead on hard evidence. If managed well, immigration drives economic growth without threatening local culture.
Hey Ritsuki (sick name by the way), reading your comment, I’m going to assume you haven’t lived in the US, and honestly, that’s what makes your points about protecting a national culture so logical. From an outside perspective, the concerns you raise are completely valid for a country with a long-established, unified identity. But as an American, I have a different take because, for us, immigration means something different. Your comment and also this article made me think about something that happened just a few weeks ago, not far from where I live. The owner of the corner bagel shop, a man who has been there for over twenty years, was suddenly deported. He knew everyone’s order, sponsored the local little league team, and was just part of the fabric of the neighborhood. He was deported over a two-decades-old issue with his visa. Seeing his shop shuttered, with a sign from his kids in the window, felt like a real loss for our community.
I understand your concerns about a country’s identity and economy, and these are the same points the current administration often uses to justify these deportations. We hear a lot about the importance of the “rule of law,” the fear that immigrants take jobs from native-born citizens, the supposed economic burden they represent, and the need for strict enforcement to ensure national security. On paper, these arguments might seem logical. But when you see them applied to the man who has served you coffee every morning for a decade, you realize they are dangerously incomplete.
Let’s dismantle these arguments. The claim that immigrants “take jobs” is based on the false idea that there is a fixed number of jobs to go around. In reality, immigrants often fill critical labor shortages in fields like agriculture, construction, and healthcare that many native-born workers are not available/willing to do. More importantly, as consumers, they create new demand for goods and services, which in turn creates more jobs and stimulates the economy. This doesn’t even touch on their role as innovators; as Dr. Hernandez’s research highlights, immigrants are 80% more likely to become entrepreneurs. That bagel shop owner wasn’t a job-taker, he was a job-maker. The economic argument collapses further when you look at taxes. That shop owner paid sales, property, and payroll taxes for twenty years. Nationally, undocumented immigrants contribute over $11 billion annually in state and local taxes, funding schools, and services they are often ineligible to use. They are net contributors, not a drain. The “rule of law” argument ignores that the immigration system is incredibly complex and backlogged; applying it rigidly to a productive community member with deep roots is not justice. And finally, while national security is vital, targeting community members with no criminal records wastes limited resources that should be focused on actual threats like terrorism or trafficking, while simultaneously breaking down the community trust that is essential for public safety.
This is where I believe the American situation is truly unique, something that might not apply to Japan or other nations. For the U.S., immigration is our single most important and defining characteristic. It is the engine of our innovation and the source of our cultural dynamism (in my opinion).
What happened to that bagel shop owner shows that this is not a federal issue, but a community one. This is why we have to stand up for our neighbors. It means supporting immigrant-owned businesses, speaking out when we see injustice, and showing our local leaders that we value the people who make our communities whole. Change won’t just come from Washington; it will come from neighborhoods deciding what they stand for. For this reason, I believe protecting the people who are woven into the fabric of our daily lives is the first and most critical step toward being the country we claim to be.
The United States is often referred to as the “nation of immigrants”. This seems paradoxical because the United States has both welcomed and restricted immigration in cycles.
For instance, around 1900, the United States established an open door policy to support rapid industrialization and workforce growth. However, as immigrant populations grew, restrictive laws emerged targeting specific groups, including the Chinese Exclusion Act of 1882 and immigration quotas in the Immigration Act of 1924. Today, we see a similar narrative of restriction with the Trump administration, such as the revocation of international student visas. These policies will have consequences, especially since international students drive much of the research and innovation in higher education.
Dr. Hernandez’s emphasis on hard evidence is especially important in our current political climate, where discussions are increasingly rhetoric-based. To limit the amount of inflammatory arguments in debates and discourse surrounding the role of immigrants, it is imperative that policy makers, leaders, and educators understand how important empirical data is when discussing polarizing topics. As a young person who witnessed the kinds of discussions happening this past election season, I hope these conversations can gradually become spaces for more critical thinking.
Lastly, a question for Dr. Hernandez: How can we use evidence to move immigration discussions beyond rhetoric and find common ground?
References:
Harvard Immigration Initiative. (2023, May 17). America’s long, fractured history of immigration. Harvard Immigration Initiative. https://immigrationinitiative.harvard.edu/americas-long-fractured-history-of-immigration/
Hi Sarah, I really agree with your point that the restriction on international student visas can have negative consequences on education. Recently, similar changes have also been proposed to the H1-B visa program for workers too. I write the economics section weekly for my school’s business club newsletter, so I’ve been trying to better understand the impacts of low immigration on the labor market. According to Dr. Exequiel Hernandez, immigration is essential for the U.S. labor market to thrive. This is because immigrants fill crucial roles and help replace Americans who are retiring or leaving their jobs. The recent reductions in immigration have been driven by an increase in ICE deportations and restrictive policies. This has caused a significant labor shortage which contributes to the slowing job growth and threatens the economy’s momentum. This shortage is especially present in construction, agriculture, and hospitality, where immigrant workers are important.
Dr. Hernandez emphasizes that immigrants do not just increase labor supply, but they also stimulate demand and innovation that create more jobs. He mentions how immigrant entrepreneurs found many companies that employ millions of people, benefitting the economy. Currently, tariffs on imported raw materials such as steel and aluminum have raised costs for many businesses, which further limits their ability to expand employment. The combination of fewer immigrant workers and higher input costs negatively impacts companies and overall economic growth. Our economy could benefit from Dr. Hernandez’s research which shows how America needs more immigrants to maintain a healthy economy.
The 80% entrepreneurship rate among immigrants versus natives reveals something policy debates often miss: immigrants create entirely new markets, rather than simply filling labor gaps.
Dr. Hernandez’s Pollo Campero example proves this. The company identified underserved segments that domestic players overlooked. As a first-generation immigrant, I see this constantly: we spot inefficiencies others can’t because we’re not constrained by ‘how things are done here’ thinking.
The advantage extends beyond mere talent diversity; it encompasses cognitive diversity. Immigrants bring different mental models for problem-solving, explaining their overrepresentation in breakthrough innovations like AI.
For businesses, the immigration debate misses a crucial strategic point. Companies need cognitive arbitrage, not just labor arbitrage. The real question isn’t whether immigrants displace jobs; it’s whether you can access the entrepreneurial risk profiles that create new markets.
I am truly convinced that immigrants are the lifeblood of modern economies. As someone who spent a year in the United States at the age of 15, is originally from Poland, and currently studies in an international high school in the United Kingdom, I’ve experienced firsthand how positively transformative it is to be surrounded by people of different origins.
As data has shown, we can no longer be blinded by stereotypes that make us view immigrants as either villains or victims. As mentioned, “immigrants keep the economy vibrant,” especially by bringing investment and innovation. The data is so favorable toward immigrants that it raises a question: how is it possible that immigrants, broadly perceived as victims, are so successful and business-driven?
From my perspective, it might be tied to the fact that all countries are designed in a way that their markets are supposed to prioritize natives, which gives those born abroad an incentive to put extra work into acquiring the best skills or innovating.
I truly resonate with the professor’s idea that “it’s not just the quantity of talent and ideas, but the variety of talent and ideas.” Each person that I’ve met during my journey of living in three different countries has proven to me how significant it is to broaden human perspective. Immigration is crucial for an increasingly interconnected economy because the variety of talent and ideas mentioned improves efficiency, and they tackle every problem from unique angles.
Globalization is increasingly discussed, so instead of hindering economic growth through prejudice, we should figure out how to ensure that policies evolve to harness the economic potential of immigration.
Agreed! I’m originally from Japan and studied in a Canadian high school for one year. I know how great it is to be surrounded by those with utterly different backgrounds. By the way, would it be possible for Maja to clarify these two points?;
1: To what extent, do you think immigrants should be expected to contribute to a host nation’s economy? Is it sustainable for them to carry such a large share of the responsibility, as in some countries like Canada?
2: In societies with a significant portion of immigrants, is there a potential risk of cultural domination where native culture is replaced by new one?
Being poor restricts cognitive bandwidth—scarcity impairs attention, willpower, and forward planning—leading to suboptimal choices that reinforce poverty, Individuals in oppressive or impoverished contexts internalize limiting beliefs, which block agency. Addressing these psychological structures is key to breaking cycles
I also agree with a point you made and share a similar belief that immigrants are a significant driving force in modern economics. In Professor Hernandez’s research, he discusses the diversity of ideas and talents that are brought into host countries, creating a heterogeneous environment. Take Fortune 500 companies, for example. According to data from the American Immigration Council, in 2024, 230 out of 500 companies were founded by immigrants or their children, illustrating the significant impact of immigrants on our community and global economy. Consider this: not only do these companies produce products, provide services, and contribute to the US economy’s GDP, but they also create jobs and support the local community’s quality of life.
I, too, am an immigrant, having immigrated twice from China to Canada, then from Canada to the US. This experience has opened my eyes to the different cultures, social norms, and worldviews that people from various places carry. Having immigrated from China and learned about the impact of the Chinese Exclusion Act on many, I believe that diversity is important because it brings a wide range of perspectives, experiences, and ideas to all spaces. Thus, my support for welcoming immigrants extends not only to economic growth but also to cultural enrichment. This summer, I attended a pre-college program at Brown University that brought students from countries all around the world, ranging from Brazil to Germany, who were confident with their own norms and beliefs. When we gather together, whether in the classroom or the student lounge, I have witnessed and come to appreciate the value of having a diverse range of opinions and experiences. In one of the discussion sessions, our teacher challenged us to debate on gentrification and its impacts on urban areas. It was inspiring that, even though we all read the same material, we each had different views and interpreted completely differently, talking about points that I never would have thought of which ended up adding more to the conversation. It was evident that when our class, representing different backgrounds, collaborates and comes together, it encourages creativity and fosters empathy and understanding for other cultures. The US economy, just like our small student cohort in the summer program, will undoubtedly benefit from a diverse talent pool and immigrants who bring new ideas and energy.