Immigration Policy Levers for U.S. Innovation and Startups

Abstract

Immigrants account for about a quarter of US invention and entrepreneurship despite a policy environment that is not well suited for these purposes. This chapter reviews the US immigration policy environment that governs how skilled migrants move to America for employment-based purposes. We discuss points of strain in the current system and potential policy reforms that would likely increase the rate of innovation and the number of startups due to immigrants in the country. Key areas include adjustments to the allocation of permanent residency visas, adjustments to the H-1B visa program, and the creation of an immigrant startup visa.

The Political Effects of Immigration: Culture or Economics?

“…However, Dustmann and Preston (2019) and Sequeira et al (2020) show that the economic benefits of immigration can persist and grow over time. Indeed, besides the potential gains from complementarity, immigrants contribute to receiving economies through innovation (Akcigit et al, 2017a,b;Burchardi et al, 2020;Hunt, 2011;Kerr and Lincoln, 2010;Moser et al, 2014), entrepreneurship (Hunt, 2011;Kerr and Kerr, 2020;Kerr et al, 2017), and by establishing links that can favor investment (Burchardi et al, 2019;Burchardi and Hassan, 2013) and trade (Dunlevy and Hutchinson, 1999;Ottaviano et al, 2018;Parsons and Vézina, 2018). 10 Returning to the short run effects of immigration, a natural question arises: why do results differ so much across studies?…”

“…See alsoHanson (2009), andKerr and Kerr (2011) for more in-depth surveys on international migration, as well as the review essay byBorjas (2015). For a review of the literature on temporary migration and on the labor market integration of refugees seeDustmann and Görlach (2016) andBrell et al (2020) respectively.6 In line with these works,Smith (2012) finds that immigration to the United States reduced labor force participation of young natives, inducing some of them to stay in school longer, whereasBoustan et al (2010) andGlitz (2012) document that immigration can reduce employment but not wages of natives Angrist and Kugler (2003).…”

The Political Effects of Immigration: Culture or Economics?

“…However, Dustmann and Preston (2019) and Sequeira et al (2020) show that the economic benefits of immigration can persist and grow over time. Indeed, besides the potential gains from complementarity, immigrants contribute to receiving economies through innovation (Akcigit et al, 2017a,b;Burchardi et al, 2020;Hunt, 2011;Kerr and Lincoln, 2010;Moser et al, 2014), entrepreneurship (Hunt, 2011;Kerr and Kerr, 2020;Kerr et al, 2017), and by establishing links that can favor investment (Burchardi et al, 2019;Burchardi and Hassan, 2013) and trade (Dunlevy and Hutchinson, 1999;Ottaviano et al, 2018;Parsons and Vézina, 2018). 10 Returning to the short run effects of immigration, a natural question arises: why do results differ so much across studies?…”

The Political Effects of Immigration: Culture or Economics?

“…However, Dustmann and Preston (2019) and Sequeira et al (2020) show that the economic benefits of immigration can persist and grow over time. Indeed, besides the potential gains from complementarity, immigrants contribute to receiving economies through innovation (Akcigit et al, 2017a,b;Burchardi et al, 2020;Hunt, 2011;Kerr and Lincoln, 2010;Moser et al, 2014), entrepreneurship (Hunt, 2011;Kerr and Kerr, 2020;Kerr et al, 2017), and by establishing links that can favor investment (Burchardi et al, 2019;Burchardi and Hassan, 2013) and trade (Dunlevy and Hutchinson, 1999;Ottaviano et al, 2018;Parsons and Vézina, 2018). 10 Returning to the short run effects of immigration, a natural question arises: why do results differ so much across studies?…”

“…See alsoHanson (2009), andKerr and Kerr (2011) for more in-depth surveys on international migration, as well as the review essay byBorjas (2015). For a review of the literature on temporary migration and on the labor market integration of refugees seeDustmann and Görlach (2016) andBrell et al (2020) respectively.6 In line with these works,Smith (2012) finds that immigration to the United States reduced labor force participation of young natives, inducing some of them to stay in school longer, whereasBoustan et al (2010) andGlitz (2012) document that immigration can reduce employment but not wages of natives Angrist and Kugler (2003).…”