More Evidence that Immigration is Good for Innovation

In the United States the national debate on immigration often overlooks one of its most important effects: its impact on our innovation economy. A new NBER paper by William Kerr highlights the crucial role that immigration plays in national economic growth.

High-skilled immigrant workers, that the United States allows in through the H-1B visa program, make significant contributions to economic growth in a number of ways. First of all, there is a disproportionate amount of “superstar” scientists such as Nobel Prize winners that come from immigrant backgrounds. These scientists make breakthrough contributions that often have enormous impacts on our science and technology and thus ultimately our economic growth. Second, immigration provides a large number of other STEM workers, workers that form the backbone of our productive capacity. Since 1995 immigrants have provided the majority of the increase in stem workers in the United States.

These inflows of workers clearly benefit the economy. The paper finds that “immigration is associated with higher levels of innovation for the United States and that the short-run consequences for natives are minimal.” Long-run consequences are less well understood—high-still immigrants do still compete with U.S. natives for work—but it is likely that the innovation gains turn any labor market outcomes into a net benefit.

In addition to providing a high-skilled workforce, immigration also provides the United States with much of its fabled “entrepreneurial spirit”. Immigrants account for a quarter of U.S. inventors and are 30% more likely to start a business than those born in the United States.

If the United States is going to be competitive it needs to recognize the enormous benefit that immigration brings not only to those allowed to immigrate but also to the nation as a whole.