Global Talent Flows

Innovation and Economic Growth

Article Snapshot

Author(s)

William R. Kerr, Çağlar Özden, Christopher Robert Parsons and Sari Pekkala Kerr

Source

Journal of Economic Perspectives, Vol. 30, No. 4, pp. 83-106, 2016

Summary

The mobility of skilled workers around the globe is important to enhancing productivity and promoting innovation worldwide. Increasingly, high-skilled migrants move to a few countries to seek education and job opportunities.

Policy Relevance

Most evidence suggests that immigration drives growth of productivity and innovation. Countries compete to attract skilled migrants.

Main Points

  • Member countries of the Organization for Economic Cooperation and Development (OECD) host two thirds of high-skilled migrants (those with at least one year of tertiary education) worldwide; low-skilled migration mostly offsets the decline in low-skilled populations.
     
  • High-skilled migrants are coming from a broader range of countries and moving to a narrower range of countries.
     
    • 70 percent move to the United States, the United Kingdom, Canada and Australia.
       
    • Historically, the United States has hosted about half of high-skilled migrants to OECD countries.
       
  • Within host countries, destinations are skewed.
     
    • Southern California, Silicon Valley, and New York City host around one eighth of all science, technology, engineering, and math (STEM) employment in the United States.
       
    • 56 percent of STEM workers in Silicon Valley in 2013 were foreign-born.
       
  • The supply of high-skilled female immigrants has outstripped the supply of males, with Africa and Asia experiencing the largest growth of high-skilled female outward migration; gender inequality drives flows of female immigration.
     
  • High-skilled occupations show agglomeration effects; that is, an individual worker’s productivity grows in proximity to other skilled workers in similar jobs; a surge of high-skilled migration increases incentives for more high-skilled workers to come to the same area.
     
  • High-skilled migrants often come with little more than raw skill or ambition, seeking educational opportunities in the host country; the four top destination countries host 69 of the top 100 universities worldwide.
     
  • Native workers compete with immigrant workers for jobs, but benefit from growth opportunities created by talent clusters; most evidence suggests that, overall, migrants boost innovation and productivity and have a positive net impact.
     
  • For sending countries, loss of high-skilled workers raises concerns about brain drain, but also creates connections to sources of capital and knowledge in other parts of the globe.
     
    • About 20 to 50 percent of immigrants return home.
       
    • High-skilled migrants are sometimes more likely to return home, but not always.
       
  • Canada and Australia admit skilled migrants through a points-based system, awarding points for educational degrees and work experience; by contrast, the United States uses a mechanism linked to employment, the H-1B visa program.
     
    • A drawback of the point system is that migrants might not be what employers are looking for, so a physicist might end up driving a taxi.
       
    • Under the H-1B program, many employers quickly use up the available visas, which means they cannot obtain needed workers.
       

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