Migration and regional innovation in Australia

Abstract

This paper provides evidence on the impact of international migrants on regional innovation. The study combines administrative individual-level data covering all Australian residents with data on intellectual property rights applications such as patents, trademarks, and design rights. The analysis uses a standard shift-share instrument based on past migrant settlements to identify the causal effects of migration on innovation. Its four main findings are the following: First, on average, a one percentage point increase in the regional employment share of higher-educated migrants relative to total employment leads to a 4.8% rise in regional patent applications in the medium run (five years). Second, while migrants of all skill and education levels have a positive impact on patenting, those in scientific occupations have the largest effect. Third, regions with lower levels of patenting benefit relatively more from increases in migration compared to those with higher patenting levels. Fourth, there is no effect of migration on trademarks or design rights applications.