The Big Beautiful Door
The Global Race for Talent: Brain Drain, Knowledge Transfer, and Growth
Marta Prato
Quarterly Journal of Economics, February 2025, Pages 165-238
Abstract:
How does inventors' migration affect international talent allocation, knowledge diffusion, and productivity growth? To answer this question, I build a novel two-country innovation-led endogenous growth model, where heterogeneous inventors produce innovations, learn from others, and make dynamic migration and return decisions. Migrants interact with individuals at origin and destination, diffusing knowledge within and across countries. To quantify this framework, I construct a micro-level dataset of migrant inventors on the US-EU corridor from patent data and document that (i) gross migration is asymmetric, with brain drain (net emigration) from the EU to the US; (ii) migrants increase their patenting by 33% per year after migration; (iii) migrants continue working with inventors at origin after moving, although less frequently; (iv) migrants' productivity gains spill over to their collaborators at origin, who increase patenting by 16% per year when a co-inventor emigrates. I calibrate the model to match the empirical results and study the impact of innovation and migration policy. A tax cut for foreigners and return migrants in the EU that eliminates the brain drain increases EU innovation but lowers US innovation and knowledge spillovers. The former effect dominates in the first 25 years, increasing EU productivity growth by 3%, but the latter dominates in the long-run, lowering growth by 3%. On the migration policy side, doubling the size of the US H1B visa program increases US and EU growth by 4% in the long-run, because it sorts inventors to where they produce more innovations and knowledge spillovers.
Is Crime a "Root Cause" of Central American Emigration? Evidence from El Salvador
Kaleb Abreha, Trinity Johnson & Raymond Robertson
Journal of Development Economics, May 2025
Abstract:
We estimate the impact of President Bukele's 2022 crime crackdown on migrant encounters at the U.S. border. El Salvador is a key source of migration through the Southern U.S. border and had high crime rates. In March 2022, a surge in violence led to a state of exception and mass arrest of suspected gang affiliates, which raised human rights concerns and significantly reduced homicides. Applying difference-in-differences and synthetic control methods, we find an 45%-67% decline in U.S. border encounters with Salvadorans relative to others.
The aggregate and distributional effects of immigration restrictions: The 1920s Quota Acts and the Great Black Migration
Bin Xie
Journal of Comparative Economics, forthcoming
Abstract:
Using county-level data and linked individual samples, this study explores the labor market impact of the immigration shock triggered by the US immigration quota system and its causal effect on the Great Black Migration. County-level analysis indicates that immigration restrictions did not affect average manufacturing wages and lowered the average occupational standings of US-born whites and immigrants. Analysis of linked individual samples reveals substantial internal migration and distributional effect caused by the immigration shock: migrants moving to counties more impacted by the shock experienced greater economic gains, while non-movers suffered greater losses. Notably, the negative immigration shock led to a marked increase in the migration of Black southerners to northern counties. Black migrants moving to more affected areas achieved higher occupational standings, increased literacy rates, and greater employment in urban manufacturing jobs.
The Contribution of Foreign Master's Students to US Start-Ups
Michel Beine, Giovanni Peri & Morgan Raux
NBER Working Paper, December 2024
Abstract:
In this paper, we estimate the effect of increasing the share of foreign-born Master graduates on the creation of innovative start-ups in the US. We combine information on international students graduating from Master's programs by university cohort with data on start-ups created in the US between 1999 and 2020 by graduates of those cohorts. To establish a causal link, we use idiosyncratic variation in out-of-state relative to in-state fees charged by universities across Master's cohorts, resulting in differential foreign students' enrollment. We also use changes in the share of foreign students predicted by a shift-share instrument, based on university-level past networks, as an additional identification strategy. For each additional ten percentage points of foreign students graduating in a Master's cohort, we find 0.4 additional start-ups in that cohort. Then, using a name-based attribution of the origin of creators of start-ups, we find that between 30 and 45% of the total start-up creation effect is attributable to a positive spillover of foreign-born on start-up founders of US origin.
Immigration is difficult?! Informing voters about immigration policy fosters pro-immigration views
Alexander Kustov & Michelangelo Landgrave
Journal of Experimental Political Science, forthcoming
Abstract:
The US public is mostly ignorant about basic immigration knowledge. While various attempts to correct misperceptions have generally failed to change people's minds about the issue, it is possible that this failure has been the result of not providing relevant information. We argue that informing the public about the difficulty of the legal immigration admission process is an effective, perspective-changing way to raise support for more open immigration policies. We test and confirm this hypothesis using a nationally representative US survey experiment (N = 1000) that informs respondents about US immigration's administrative burdens and restrictions through short verifiable narratives. We also provide the first evidence of the widespread ignorance about the immigration process across diverse political and demographic groups. Our results suggest that providing a better understanding of the immigration process' difficulty has more promise to change public policy preferences than challenging skeptics' crystallized beliefs about immigration's effects or numbers.
Immigrant Age at Arrival and the Intergenerational Transmission of Ethnic Identification among Mexican Americans
Brian Duncan & Stephen Trejo
NBER Working Paper, January 2025
Abstract:
Many U.S.-born descendants of Mexican immigrants do not identify as Mexican or Hispanic in response to the Hispanic origin question asked in the Census and other government surveys. Analyzing microdata from the 2000 U.S. Census and the 2001-2019 American Community Surveys, we show that the age at arrival of Mexican immigrants exerts an important influence on ethnic identification not only for these immigrants but also for their U.S.-born children. Among Mexican immigrants who arrived as children, the rate of "ethnic attrition" -- i.e., not self-identifying as Mexican or Hispanic -- is higher for those who migrated at a younger age. Moreover, the children of these immigrants exhibit a similar pattern: greater ethnic attrition among children whose parents moved to the United States at a younger age. We unpack the relative importance of several key mechanisms -- parental English proficiency, parental education, family structure, intermarriage, and geographic location -- through which the age at arrival of immigrant parents influences the ethnic identification of their children. Intermarriage turns out to be the primary mechanism: Mexican immigrants who arrived at a very young age are more likely to marry non-Hispanics, and the rate of ethnic attrition is dramatically higher among children with mixed ethnic backgrounds.
Not a border crisis, but a labor market crisis: The often overlooked "pull" factor of U.S. border crossings
Dany Bahar
Journal of Policy Analysis and Management, forthcoming
Abstract:
This study investigates the link between Southwest U.S. border crossings and labor market tightness, measured by the job openings to unemployed ratio, over nearly 25 years (2000 to 2024). Analyzing monthly data, it finds a strong positive correlation, suggesting that increased border crossings strongly align with greater job availability. Exploiting data across different presidential administrations reveals no statistically significant differences in this relationship, regardless of the President's party. The findings suggest a natural economic adjustment mechanism in which crossings naturally decrease as the labor market cools.
Enclaves and Assimilation in the Age of Mass Migration: Evidence from Ethnic Catholic Churches
Ran Abramitzky, Leah Platt Boustan & Osea Giuntella
NBER Working Paper, January 2025
Abstract:
Immigrant enclaves offer valuable ethnic amenities but may delay assimilation. We study enclave formation in the Age of Mass Migration by using the centralized location decisions for "ethnic" Catholic churches. After a church opening, same-ethnicity residents of chosen neighborhoods experienced falling earnings but strengthened communal ties, as compared to residents of areas matched on baseline characteristics. Treated residents held more manual occupations, and increased in-group marriage and naming. These effects persist into the second generation and are not observed for non-ethnic neighbors. Consistent with the historical record, Poles organized communal life around neighborhood parishes, but Italians were less church-centered.
Documenting the Undocumented: The Impact of Employment Verification Mandates on Government Borrowing Costs
Lei Li et al.
Northeastern University Working Paper, October 2024
Abstract:
The impact of undocumented immigrants on the economy is a subject of ongoing debate. We contribute to this debate by examining the effect of undocumented workers on municipal bond markets. Focusing on the adoption of employment verification (E-Verify) laws, which are designed to prevent the hiring of unauthorized workers, we document that the adoption of E-Verify laws leads to a significant decrease in municipal bond offering spreads, indicating reduced government borrowing costs. This effect is more pronounced in states that have a larger population of undocumented immigrants prior to the enactment of E-Verify laws, states perceived to have stronger enforcement of the laws, and states where residents pay greater attention to immigration issues. We also find that E-Verify laws lead to lower levels of governmental expenditures on education, social welfare, hospitals, and police, as well as lower fiscal deficits, constituting possible channels underlying the reduced borrowing costs of municipal governments. Overall, our study sheds light on the significant economic implications of E-Verify laws through the lens of municipal bond markets.