High Skill Immigration in the Global Economy

October 25, 2013
William R. Kerr of Harvard University and Sarah Turner of University of Virginia, Organizes

Petra Moser, Stanford University and NBER; Alessandra Voena, University of Chicago and NBER; and Fabian Waldinger, University of Warwick

German-Jewish Emigres and U.S. Invention

Historical accounts suggest that the arrival of German Jewish émigrés who fled the Nazi regime revolutionized U.S. science and innovation. Moser, Voena, and Waldinger present the first systematic analysis of the émigrés’ effects on U.S. innovation. Difference-in-differences analyses compare changes in patenting by U.S. inventors in chemistry for research fields of German émigrés to the United States with fields of other German chemists. This test suggests that U.S. invention increased by 31 percent after 1933 in the fields of émigrés. Regressions that use the pre-1933 fields of dismissed German chemists as an instrument for fields of émigrés indicate that ordinary least squares (OLS) may underestimate effects on U.S. innovation. Evidence from a new dataset on the patent histories of more than 500,000 U.S. inventors indicates that the émigrés' arrival increased U.S. innovation by attracting a new group of U.S. researchers to their fields, rather than by increasing the productivity of incumbent U.S. inventors.

William R. Kerr

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

Kerr tests the importance of Ricardian technology differences for international trade. The empirical analysis has three comparative advantages: including emerging and advanced economies, isolating panel variation regarding the link between productivity and exports, and exploiting heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across U.S. cities with historical settlement patterns for migrants. The instrumented elasticity of export growth on the intensive margin to the exporter' s productivity growth is between 1.6 and 2.4 depending upon weighting.

Ajay Agrawal, University of Toronto and NBER; John McHale, National University of Ireland; and Alexander Oettl, Georgia Institute of Technology

Does a Decline in Star Immigration Help or Harm US Science?

Evidence suggests that the propensity of foreign star scientists to immigrate to the United States may be in decline. Would such a decline help or harm U.S. science? Agrawal, McHale, and Oettl develop a model in which immigrant scientists enhance national welfare by increasing the labor supply. At the same time, they may harm domestic science if there are displacement effects on domestic scientists and if spillovers generated by immigrant scientists are significantly lower than those from their domestic counterparts. Using data from a variety of scientific disciplines, the authors examine evidence for differential spillovers from star scientists based on an examination of four distinct channels discussed in the literature: 1) citations, 2) collaborations, 3) colleague productivity, and 4) recruiting. Although the authors find evidence suggesting that immigrant scientists generate more spillovers internationally, they do not find that they generate fewer spillovers domestically. Thus, combining these findings with existing evidence of limited displacement effects at the faculty level, the authors conclude that a decline in star scientist immigration would likely harm U.S. science.

Shulamit Kahn, Boston University, and Megan MacGarvie, Boston University and NBER

Do Return Requirements Increase International Knowledge Diffusion?

Sarah Turner

College in the States: Foreign Student Demand and Higher Education Supply in the U.S

Alberto Alesina, Harvard University and NBER; Johann Harnoss, University of Lille; and Hillel Rapoport, Bar Ilan University

Birthplace Diversity and Economic Prosperity (NBER Working Paper 18699)

Alesina, Harnoss, and Rapoport use recent immigration data from 195 countries and propose an index of population diversity based on birthplaces. This new index is then decomposed into a size (share of foreign born) and a variety (diversity of immigrants) component and is available for 1990 and 2000 disaggregated by skill level. The authors show that birthplace diversity is largely uncorrelated with ethnic, linguistic, or genetic diversity. Their main result is that the diversity of skilled immigration relates positively to economic development (as measured by income and total factor productivity per capita and patent intensity) even after controlling for ethno-linguistic and genetic fractionalization, geography, trade, education, institutions and origin-effects capturing income/productivity levels in the immigrants' home countries. The authors make progress toward addressing endogeneity by specifying a gravity model to predict the share and diversity of immigration based on exogenous bilateral variables. The results are robust across various ordinary least squares and two-stage least squares specifications and suggestive of skill complementarities between native workers and immigrants, especially when the latter come from richer countries at intermediate levels of cultural proximity.

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