Immigration, Innovation, and Growth

94 Pages Posted: 5 May 2020 Last revised: 25 Jun 2022

See all articles by Konrad Burchardi

Konrad Burchardi

Stockholm University - Institute for International Economic Studies (IIES); Stockholm University; Centre for Economic Policy Research (CEPR)

Thomas Chaney

SciencesPo - Sciences Po - Department of Economics; Centre for Economic Policy Research (CEPR)

Tarek A. Hassan

Boston University; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Lisa Tarquinio

University of Western Ontario - Department of Economics

Stephen Terry

Boston University; National Bureau of Economic Research

Multiple version iconThere are 3 versions of this paper

Date Written: May 2020

Abstract

We show a causal impact of immigration on innovation and growth in US counties. To identify the causal impact of immigration, we use 130 years of detailed data on migrations from foreign countries to US counties to isolate quasi-random variation in the ancestry composition of US counties; interacting this plausibly exogenous variation in ancestry composition with the recent inflows of migrants from different origins, we predict the total number of migrants flowing into each US county in recent decades. We show immigration has a positive causal impact on innovation, measured as patenting of local firms, and on economic growth, measured as real income growth for native workers. We interpret those results through the lens of a quantitative model of endogenous growth and migrations. A structural estimation of this model targeting the well identified causal impact of migration on innovation suggests the large inflow of foreign migrants into the US since 1965 may have contributed to an additional 8% growth in innovation and 5% growth in wages.

Suggested Citation

Burchardi, Konrad and Chaney, Thomas and Hassan, Tarek Alexander and Tarquninio, Lisa and Terry, Stephen, Immigration, Innovation, and Growth (May 2020). NBER Working Paper No. w27075, Available at SSRN: https://ssrn.com/abstract=3592153

Konrad Burchardi (Contact Author)

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

Stockholm University

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Thomas Chaney

SciencesPo - Sciences Po - Department of Economics ( email )

28, rue des Saints-Pères
Paris, Paris 75007
France

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Tarek Alexander Hassan

Boston University ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Lisa Tarquninio

University of Western Ontario - Department of Economics ( email )

Social Science Centre Room 4071
London, Ontario N6A 5C2
Canada

Stephen Terry

Boston University ( email )

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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