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How Much Does Immigration Boost Innovation?

47 Pages Posted: 8 Sep 2008 Last revised: 11 Aug 2010

Jennifer Hunt

Rutgers University; McGill University - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Marjolaine Gauthier-Loiselle

Princeton University - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: September 2008

Abstract

We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant inventors crowd out native inventors, or an underestimate if immigrants have positive spill-overs on inventors. Using a 1950-2000 state panel, we show that natives are not crowded out by immigrants, and that immigrants do have positive spill-overs, resulting in an increase in patents per capita of about 15% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the initial share of immigrant high school dropouts from Europe, China and India. In both data sets, the positive impacts of immigrant post-college graduates and scientists and engineers are larger than for immigrant college graduates.

Suggested Citation

Hunt, Jennifer and Gauthier-Loiselle, Marjolaine, How Much Does Immigration Boost Innovation? (September 2008). NBER Working Paper No. w14312. Available at SSRN: https://ssrn.com/abstract=1264574

Jennifer Hunt (Contact Author)

Rutgers University ( email )

75 Hamilton Street
New Brunswick, NJ 08901
United States

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Leacock Building Room 443
Montreal, QC H3A 2T7
Canada
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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Marjolaine Gauthier-Loiselle

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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