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STEMWorkers, H1B Visas and Productivity in US Cities

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  • Giovanni Peri

    ()
    (UC, Davis)

  • Kevin Shih

    (UC, Davis)

  • Chad Sparber

    ()
    (Colgate University)

Abstract

Scientists, Technology professionals, Engineers, and Mathematicians (STEM workers) are the fundamental inputs in scientific innovation and technological adoption. Innovation and technological adoption are, in turn, the main drivers of productivity growth in the U.S. In this paper we identify STEM workers in the U.S. and we look at the effect of their growth on the wages and employment of college and non-college educated labor in 219 U.S. cities from 1990 to 2010. In order to identify a supply-driven and heterogenous increase in STEM workers across U.S. cities, we use the dependence of each city on foreign-born STEM workers in 1980 (or 1970) and exploit the introduction and variation (over time and across nationalities) of the H-1B visa program, which expanded access to U.S. labor markets for foreign-born college-educated (mainly STEM) workers. We find that H-1B-driven increases in STEM workers in a city were associated with significant increases in wages paid to both STEM and non-STEM college-educated natives. Non-college educated show no significant wage or employment effect. We also find evidence that STEM workers caused cities to experience higher housing prices for college graduates, increased specialization in high human capital sectors, and a rise in the concentration of natives in cognitive occupations. The magnitudes of these estimates imply that STEM workers contributed significantly to total factor productivity growth in the U.S. and across cities and — to a lesser extent — to the growth in skill-bias between 1990 and 2010.

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Bibliographic Info

Paper provided by Norface Research Programme on Migration, Department of Economics, University College London in its series Norface Discussion Paper Series with number 2013009.

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Date of creation: Mar 2013
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Handle: RePEc:nor:wpaper:2013009

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Keywords: STEMWorkers; H-1B; Foreign-Born; Productivity; College-Educated; Wage; Employment.;

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References

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  1. Susana Iranzo & Giovanni Peri, 2009. "Schooling Externalities, Technology, and Productivity: Theory and Evidence from U.S. States," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 420-431, May.
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Citations

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Cited by:
  1. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2014. "Firms and the Economics of Skilled Immigration," Harvard Business School Working Papers 14-102, Harvard Business School.
  2. William R. Kerr, 2013. "U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence," NBER Working Papers 19377, National Bureau of Economic Research, Inc.
  3. Dr Max Nathan, 2013. "The Wider Economic Impacts Of High-Skilled Migrants: A Survey Of The Literature," NIESR Discussion Papers 11607, National Institute of Economic and Social Research.
  4. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2013. "Skilled Immigration and the Employment Structures of U.S. Firms," Harvard Business School Working Papers 14-040, Harvard Business School.
  5. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer, vol. 3(1), pages 1-20, December.
  6. Peri, Giovanni & Shih, Kevin Y., 2013. "Foreign Scientists and Engineers and Economic Growth in Canadian Labor Markets," IZA Discussion Papers 7367, Institute for the Study of Labor (IZA).
  7. William R. Kerr, 2013. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," NBER Working Papers 19657, National Bureau of Economic Research, Inc.
  8. Winters, John V., 2013. "STEM Graduates, Human Capital Externalities, and Wages in the U.S," IZA Discussion Papers 7830, Institute for the Study of Labor (IZA).
  9. Amandine AUBRY & Michal BURZYŃSKI, 2013. "The Welfare Impact of Global Migration in the OECD Countries," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013035, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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