How Much Does Immigration Boost Innovation?

51 Pages Posted: 18 Feb 2009

See all articles by Marjolaine Gauthier-Loiselle

Marjolaine Gauthier-Loiselle

Princeton University - Department of Economics

Jennifer Hunt

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

Multiple version iconThere are 3 versions of this paper

Date Written: January 2009

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 1940-2000 state panel, we show that immigrants do have positive spill-overs, resulting in an increase in patents per capita of 9-18% 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 state's predicted increase in the share of skilled immigrants. We base the latter on the 1940 distribution across states of immigrants from various source regions and the subsequent national increase in skilled immigrants from these regions.

Keywords: Immigration, Innovation

JEL Classification: D24, J61, O32

Suggested Citation

Gauthier-Loiselle, Marjolaine and Hunt, Jennifer and Hunt, Jennifer, How Much Does Immigration Boost Innovation? (January 2009). CEPR Discussion Paper No. DP7116, Available at SSRN: https://ssrn.com/abstract=1345642

Marjolaine Gauthier-Loiselle

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Jennifer Hunt (Contact Author)

McGill University - Department of Economics ( email )

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Leacock Building Room 443
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Rutgers University ( email )

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Centre for Economic Policy Research (CEPR)

London
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IZA Institute of Labor Economics

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National Bureau of Economic Research (NBER)

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