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      The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention
      21 Jan 2009Working Paper Summaries

      The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention

      by William R. Kerr and William F. Lincoln
      The H-1B visa program governs most admissions of temporary immigrants into the U.S. for employment in patenting-related fields. This program has become a point of significant controversy in the public debate over immigration, with proponents and detractors at odds over how important H-1B admission levels are for U.S. technology advancement and whether native U.S. workers are being displaced by immigrants. In this study, Kerr and Lincoln quantify the impact of changes in H-1B admission levels on the pace and character of U.S. invention over the 1995-2006 period. Key concepts include:
      • Immigrants represented 24 percent and 47 percent of the U.S.'s scientists and engineers (S&Es) with bachelors and doctorate educations in the 2000 Census, respectively. Immigrants have accounted for most of the net increase in U.S. S&Es since 1995.
      • Because it governs the admissions of many S&E immigrants, the H-1B program plays an important role in U.S. innovation. Moreover, the policy shifts in this program have been relatively large compared to other policies concerning immigration or innovation.
      • Fluctuations in H-1B admissions levels significantly influence the rate of Indian and Chinese patenting in cities and firms dependent upon the program relative to their peers.
      • Most specifications find little impact on the invention rates of native U.S. workers, although a small crowding-in effect may exist. Most increases in U.S. innovation with higher H-1B admissions come through direct contributions of the immigrants themselves.
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      Author Abstract

      This study evaluates the impact of high-skilled immigrants on US technology formation. Specifically, we use reduced-form specifications that exploit large changes in the H-1B visa program. Fluctuations in H-1B admissions levels significantly influence the rate of Indian and Chinese patenting in cities and firms dependent upon the program relative to their peers. Most specifications find weak crowding-in effects or no effect at all for native patenting. Total invention increases with higher admission levels primarily through the direct contributions of ethnic inventors.

      Paper Information

      • Full Working Paper Text
      • Working Paper Publication Date: December 2008
      • HBS Working Paper Number: 09-005
      • Faculty Unit(s): Entrepreneurial Management
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      William R. Kerr
      William R. Kerr
      Dimitri V. D'Arbeloff - MBA Class of 1955 Professor of Business Administration
      Unit Head, Entrepreneurial Management
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