Does High-Skill Immigration Increase Innovation and Productivity?

Not really, says a new article by Harvard's George Borjas,

The most persuasive evaluation of the program examines a peculiar lottery. Firms can apply for visas on a first-come, first-served basis until the visas run out. On some random day, the visas run out and on that day more firms typically apply than there are visas available. A lottery determines the lucky winners. It turns out that the firms that won the lottery do not patent more, and that each H-1B visa crowds out one native worker. This evidence is far more consistent with the flood of news reports documenting how employers abuse the program and force the displaced natives to train their foreign-born replacements.

Despite the contradictory evidence, there is a sensible way to proceed. Some native workers undoubtedly lose. But let’s take Bill Gates at face value. If Microsoft really creates so many new jobs, Microsoft is profiting substantially and should be willing to pay many thousands of dollars for each visa. Let’s use those funds to compensate and retrain the affected workers. Actions speak louder than words: Would the high-tech tycoons actually be willing to pay substantial amounts for those permits?

Borjas recently released a book titled We Wanted Workers: Unraveling the Immigration Narrative that covers this same topic in much greater detail and is highly recommended. Alternatively, you could check out Paul Collier's book Exodus: How Migration is Changing Our World for a less American-centric evaluation of the impact of immigration for the world's poor.

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