Immigration and innovation

Skilled immigrants have had a substantial effect on the number of patents per capita in the United States, says the National Bureau of Economic Research (NBER).

In 2003, immigrants patented at double the rate of natives, implying that immigrant inventors were crowding out native inventors. However, the difference is fully explained by the greater share of immigrants with science and engineering degrees. In fact, skilled immigrants have had a substantial positive effect on the number of patents per capita in the United States, says the NBER.

Researchers measured the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behaviour as well as state-level determinants of patenting. They found:

Natives are not crowded out by immigrants and immigrants do have positive spill-over’s resulting in an increase in patents per capita of about 15 per cent in response to a one percentage point increase in immigrant college graduates.

Between 1990 and 2000, the 1.3 percentage point increase in the share of the population composed of immigrant college graduates increased patenting per capita by about 20 per cent.

The .7 percentage point increase in the share of post-college immigrants increased patenting per capita by about 21 per cent.

The .45 percentage point increase in immigrant scientists and engineers increased patenting per capita by about 22 per cent.

Could it be that these immigrants are merely crowding out native-born Americans? If so, their actual impact on U.S. innovation would be overstated by the above statistics. But researchers did not find evidence that immigrants crowd out natives from certain occupations or states. Furthermore, they concluded that immigrants increase patenting per capita without reducing native patenting.

Source: Jennifer Hunt and Mariolaine Gauthier-Loiselle, How Much Does Immigration Boost Innovation, National Bureau of Economic Research, Working Paper, No. 14312, September 2008.

For text: http://www.nber.org/papers/w14312

For more on Immigration Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=34

FMF Policy Bulletin/ 20 January 2009