The entry into the new year is commonly marked by a surge in new years resolutions, as people aspire to eat more healthily or visit the gym more frequently.  Research from Iowa State University also suggests it sees a surge in entrepreneurship among immigrants.

The paper suggests that the ratio of immigrants who are self-employed versus in full-time employment tends to be higher in areas where January temperatures are higher.  Indeed, for each additional 10 degrees Fahrenheit, there was a 1.46% rise in the rate of entrepreneurship among immigrants.

“That may not sound like a lot, but 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,” the authors explain.

Encouraging self-employment

In the United States, it is well established that the population is growing most vehemently in the South and West, with this driven in large part by the high immigrant populations in these regions.  It’s also well established that entrepreneurship is higher among immigrants, due to a variety of factors, including a lack of networks and familiarity with local employment systems.

Nonetheless, the difference in entrepreneurship rates surprised the researchers, who believe this may be because immigrants are more willing to put up with cold temperatures for a short time, but starting a business tends to be a longer-term endeavor.

“A lot of immigrants have never lived in a cold area and don’t really know how well they will adapt. If you’re uncertain about your own preferences and ability to acclimate, you may be averse to starting a business in an unfamiliar setting,” the researchers suggest.

Of course, correlation doesn’t equal causation, and the researchers attempted to exclude other possible factors, including linguistic, source destinations, and education and wealth levels of the immigrants involved.

Other factors

While it was indeed the case that areas with higher labor force participation tended to have fewer entrepreneurs, this was not a big enough factor on its own to explain the geographical differences.  Similarly, a higher share of immigrants in a region who speak the same language also played a role in entrepreneurship rates, with the researchers suggesting that higher proportions of immigrants open up opportunities to create businesses serving these communities.

The researchers also explored whether immigrants from warmer countries were also more likely to settle in warmer parts of the United States, but they found little real evidence of this.  Indeed, immigrants from colder countries, such as Canada, also seemed to prefer moving to warmer parts of the US.

They were also able to remove the possibility of wealth or education playing a role, and were therefore confident that the climate really was a significant factor.  What’s more, there was also no apparent difference in the native rate of entrepreneurship in warmer versus cooler climates, suggesting that it is something unique to immigrants.

Despite this, a reason for “why” the climate plays such a role was more elusive.  Nonetheless, the authors believe that if regions wish to boost economic development, they could keep these factors in mind.

“It’s important to recognize that cold areas, like the Midwest, have some unique challenges to attract outside talent. If they can get people to think of these places as home, they are more likely to stay and may start a business,” they conclude.