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Marriott Marquis, Grand Ballroom 12
Hosted By:
American Economic Association
Effects of Immigration on American Science and Innovation
Paper Session
Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Ethan G. Lewis, Dartmouth College
Immigration and Entrepreneurship in the United States
Abstract
Immigration is often viewed as expanding the labor supply and creating greater competition for domestic workers. But immigrants may also play important roles in innovation, including starting new firms, that may both drive productivity growth and expand labor demand. This paper uses newly available U.S. administrative data to study the role of immigrants in entrepreneurship. We ask how often immigrants start companies, how many jobs these firms create, and how often these firms appear in high-tech sectors and achieve explosive growth. The findings suggest that immigrants are as much “job creators” as “job takers” and that non-U.S. born founders play outsized roles in U.S. high-growth entrepreneurship.Immigrant Entrepreneurship: Job Creation, Job Quality, and Innovation
Abstract
This paper examines immigrant entrepreneurship in the Survey of Business Owners (SBO) and the Longitudinal Employer Household Dynamics (LEHD) database. We quantify the rate of firm ownership by immigrants in the United States, as well as the contribution of immigrant entrepreneurs in terms job creation. First-generation immigrants create about 25% of new firms in the United States, but this share can exceed 40% in some states. Immigrant-owned firms, on average, create fewer jobs than native-owned firms, but much of this is explained by the industry and geographic location of the firms. Immigrant-owned firms pay comparable wages, conditional on firm traits, to native-owned firms, but are less likely to offer employee benefits such as health insurance and paid time off. Moreover, the jobs generated by immigrant founders are disproportionately occupied by immigrant employees, most often hailing from the same place of birth as the founder(s). The duration of jobs in immigrant founded firms is longer, but only among immigrant employees. Finally, while firms founded by high-skilled immigrants are more likely to file for patents, the average number of granted patents remains below that of similar native-founded firms.Immigration, Science, and Invention - Lessons from the Quotas Acts
Abstract
In 1921 and 1924, the United States first adopted immigration quotas for “undesirable” nationalities to stem the inflow of low-skilled Eastern and Southern Europeans (ESE). This paper investigates whether these quotas inadvertently hurt American science and invention. Detailed biographic data on the birth place, immigration, education, and employment histories of more than 80,000 American scientists reveal a dramatic decline in the arrival of ESE-born scientists after 1924. An estimated 1,170 ESE-born scientists were missing from US science by the 1950s. To examine the effects of this change on invention, we compare changes in patenting by US scientists in the pre-quota fields of ESE-born scientists with changes in other fields in which US scientists were active inventors. Methodologically, we apply k-means clustering to scientist-level data on research topics to assign each scientists to a research field, and then compare changes in patenting for the pre-quota fields of ESE-born US scientists with the pre-quota fields of other US scientists. Baseline estimates indicate that the quotas led to 68 percent decline in US invention in ESE fields. Decomposing this effect, we find that the quotas reduced not only the number of US scientists working in ESE fields, but also the number of patents per scientist. Firms that had employed ESE-born immigrants before the quotas experienced a 53 percent decline in invention. The quotas damaging effects on US invention persisted into the 1960s.JEL Classifications
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- N0 - General