The Pros and Cons of High-Skilled Immigration

By TAP Staff Blogger

Posted on December 12, 2012


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High-skilled immigration is a top policy issue for the technology industry. National organizations with leading tech companies as members, such as Microsoft, Facebook, Google, Amazon.com, and Intel, to name a few, have supported efforts to keep high-skilled immigrants who have been educated in the United States in this country post-graduation. For example, the Computer & Communications Industry Association (CCIA) encouraged congressional leaders in both parties to move forward with a STEM visa bill. And the Consumer Electronic Association (CEA) has launched the Innovation Movement to support public policies – skilled immigration among them – that encourage and advance American business innovation.
 
Here is what scholars are saying about many of the high-skilled immigration issues:
 
The Effect on Wages
In “The Economic Value of Cultural Diversity: Evidence from U.S. Cities,” Professors of Economics Giovanni Peri, University of California, Davis, and Gianmarco I.P. Ottaviano, Bocconi University, found that US cities that attracted immigrants experienced a significant increase in average wages and in housing values. For an alternate perspective, computer science Professor Norm Matloff, University of California, Davis, shows in “On the Need for Reform of the H-1B Non-Immigrant Work Visa in Computer-Related Occupations” that the industry’s motivation for hiring H-1Bs is primarily a desire for cheap, compliant labor.
 
The Impact on Productivity and Innovation
Professors William R. Kerr, Harvard Business School, and William F. Lincoln, Johns Hopkins University, used immigration and patent data to examine the effect of skilled immigrants on innovation in the United States. In “The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention,” Professors Kerr and Lincoln show that total invention increases with higher admission levels, primarily through the direct contributions of ethnic inventors. Likewise, Professor Giovanni Peri demonstrates in “The Effect of Immigration on Productivity: Evidence from US States” that attracting immigrants, especially highly educated ones, is a strategy to increase employment, investment, and productivity in a local economy.
 
Looking into “How Much Does Immigration Boost Innovation?”, Professor Jennifer Hunt, Rutgers University, and Ph.D. candidate Marjolaine Gauthier-Loiselle, Princeton University, discovered that immigrants patent at double the rate of US workers. This is entirely accounted for by their disproportionately holding degrees in science and engineering. The professors then demonstrate that a 1 percent increase in the number of college-educated immigrants increased patents per capita in the US by 15 percent.
 
Professor Enrico Moretti, University of California, Berkeley, found that when the high-tech sector does well, the benefits don’t just go to high-tech workers. In The New Geography of Jobs, Professor Moretti shows that for each new high-tech job in a city, five additional jobs are ultimately created outside of the high-tech sector in that city, both in skilled occupations (doctors, lawyers, teachers), and unskilled (waiters, hairdressers, carpenters).
 
The Skills Gap
In Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It, Economics Professor Peter Cappelli, University of Pennsylvania, questions if there really is a skills gap. Professor Cappelli examines employers’ arguments that applicants are not qualified and schools are not preparing students for jobs. He then discusses what kind of training could best bridge the gap between employer expectations and applicant realities.

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