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High-Skill Immigration, Innovation, and Creative Destruction

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  • Gaurav Khanna
  • Munseob Lee

Abstract

Economists have identified product entry and exit as a primary channel through which innovation impacts economic growth. In this paper, we document how high-skill immigration affects product reallocation (entry and exit) at the firm level. Using data on H-1B Labor Condition Applications (LCAs) matched to retail scanner data on products and Compustat data on firm characteristics, we find that H-1B certification is associated with higher product reallocation and revenue growth. A ten percent increase in the share of H-1B workers is associated with a two percent increase in product reallocation rates – our measure of innovation. These results shed light on the economic consequences of innovation by high-skill immigrant to the United States.

Suggested Citation

  • Gaurav Khanna & Munseob Lee, 2018. "High-Skill Immigration, Innovation, and Creative Destruction," NBER Working Papers 24824, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24824
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    References listed on IDEAS

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    1. Christian Broda & David E. Weinstein, 2010. "Product Creation and Destruction: Evidence and Price Implications," American Economic Review, American Economic Association, vol. 100(3), pages 691-723, June.
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    5. John Bound & Breno Braga & Joseph M. Golden & Gaurav Khanna, 2015. "Recruitment of Foreigners in the Market for Computer Scientists in the United States," Journal of Labor Economics, University of Chicago Press, vol. 33(S1), pages 187-223.
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    10. David Argente & Munseob Lee, 2021. "Cost of Living Inequality During the Great Recession," Journal of the European Economic Association, European Economic Association, vol. 19(2), pages 913-952.
    11. David Argente & Munseob Lee, 0. "Cost of Living Inequality During the Great Recession," Journal of the European Economic Association, European Economic Association, vol. 19(2), pages 913-952.
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    Cited by:

    1. Crown, Daniel & Faggian, Alessandra & Corcoran, Jonathan, 2020. "Foreign-Born graduates and innovation: Evidence from an Australian skilled visa program✰,✰✰,★,★★," Research Policy, Elsevier, vol. 49(9).
    2. Colas, Mark & Sachs, Dominik, 2022. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Rationality and Competition Discussion Paper Series 352, CRC TRR 190 Rationality and Competition.
    3. C. Annique Un & Chhomran Ou & Silvy Un Lafayette, 2022. "From the liability to the advantage of refugeeness," Journal of International Business Policy, Palgrave Macmillan, vol. 5(4), pages 530-561, December.

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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