COVID-19 and Anti-Asian Discrimination: Impacts on Startups

An interesting and sobering new study from Germany’s Institute for Labor Economics (IZA) details how the COVID-19 pandemic has fueled anti-Asian discrimination in the US, and how such discrimination has affected business startups and growth rates among Asian-American entrepreneurs.  Sadly, the news is not good.  The researchers find that, since January 2020, business activity among Asian Americans has declined at a rate that 17% faster than the declines seen among non-Hispanic White Americans.   These impacts have been especially pronounced among recent immigrants and immigrants from East Asia (primarily China).  Digging deeper, the study finds that exit rates from self-employment by Asian Americans have jumped rapidly during the pandemic, and that the disruptions have equally affected both incorporated and unincorporated businesses.  As the nation continues dealing with the impacts of anti-AAPI discriminations, the effects on business activity must also be addressed.

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