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High-Skilled Immigration and the Rise of STEM Occupations in US Employment

In: Education, Skills, and Technical Change: Implications for Future US GDP Growth

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  • Gordon H. Hanson
  • Matthew J. Slaughter

Abstract

In this paper, we document the importance of high-skilled immigration for U.S. employment in STEM fields. To begin, we review patterns of U.S. employment in STEM occupations among workers with at least a college degree. These patterns mirror the cycle of boom and bust in the U.S. technology industry. Among younger workers, the share of hours worked in STEM jobs peaked around the year 2000, at the height of the dot-com bubble. STEM employment shares are just now approaching these previous highs. Next, we consider the importance of immigrant labor to STEM employment. Immigrants account for a disproportionate share of jobs in STEM occupations, in particular among younger workers and among workers with a master's degree or PhD. Foreign-born presence is most pronounced in computer-related occupations, such as software programming. The majority of foreign-born workers in STEM jobs arrived in the U.S. at age 21 or older. Although we do not know the visa history of these individuals, their age at arrival is consistent with the H-1B visa being an important mode of entry for highly trained STEM workers into the U.S. Finally, we examine wage differences between native and foreign-born labor. Whereas foreign-born workers earn substantially less than native-born workers in non-STEM occupations, the native-foreign born earnings difference in STEM jobs is much smaller. Further, foreign-born workers in STEM fields reach earnings parity with native workers much more quickly than they do in non-STEM fields. In non-STEM jobs, foreign-born workers require 20 years or more in the U.S. to reach earnings parity with natives; in STEM fields, they achieve parity in less than a decade.
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  • Gordon H. Hanson & Matthew J. Slaughter, 2017. "High-Skilled Immigration and the Rise of STEM Occupations in US Employment," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 465-494, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13707
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    Cited by:

    1. Nir Jaimovich & Henry E. Siu, 2017. "High-Skilled Immigration, STEM Employment, and Nonroutine-Biased Technical Change," NBER Chapters, in: High-Skilled Migration to the United States and Its Economic Consequences, pages 177-204, National Bureau of Economic Research, Inc.
    2. Black, Sandra E. & Muller, Chandra & Spitz-Oener, Alexandra & He, Ziwei & Hung, Koit & Warren, John Robert, 2021. "The importance of STEM: High school knowledge, skills and occupations in an era of growing inequality," Research Policy, Elsevier, vol. 50(7).
    3. Giovanni Marin & Francesco Vona, 2017. "Finance and the Misallocation of Scientific, Engineering and Mathematical Talent," SciencePo Working papers Main hal-03455397, HAL.
    4. Garnett Picot & Feng Hou, 2019. "Why do STEM immigrants do better in one country than another?," IZA World of Labor, Institute of Labor Economics (IZA), pages 459-459, April.
    5. Bongers Anelí & Torres José L. & Díaz-Roldán Carmen, 2022. "Highly Skilled International Migration, STEM Workers, and Innovation," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 73-89, January.
    6. repec:hal:spmain:info:hdl:2441/510i09nqpa8gfpt7na72sknq4q is not listed on IDEAS
    7. Morgan Raux, 2019. "Looking for the "Best and Brightest": Hiring difficulties and high-skilled foreign workers," Working Papers halshs-02364921, HAL.
    8. Ma, Jie, 2020. "High skilled immigration and the market for skilled labor: The role of occupational choice," Labour Economics, Elsevier, vol. 63(C).
    9. Filippo Bontadini & Francesco Vona, 2023. "Anatomy of Green Specialisation: Evidence from EU Production Data, 1995–2015," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(3), pages 707-740, August.
    10. Lin, Gary C., 2019. "High-skilled immigration and native task specialization in U.S. cities," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 289-305.
    11. Amornsiripanitch, Natee & Gompers, Paul A. & Hu, George & Vasudevan, Kaushik, 2023. "Getting schooled: Universities and VC-backed immigrant entrepreneurs," Research Policy, Elsevier, vol. 52(7).
    12. Assaf Razin, 2017. "Globalization Policies and Israel’s Brain Drain," NBER Working Papers 23251, National Bureau of Economic Research, Inc.
    13. Bächli, Mirjam & Tsankova, Teodora, 2020. "Free Movement of Workers and Native Demand for Tertiary Education," Other publications TiSEM 33968781-3521-459e-86c9-f, Tilburg University, School of Economics and Management.
    14. Bachli, Mirjam & Tsankova, Teodora, 2020. "Free movement of workers and native demand for tertiary education," CAGE Online Working Paper Series 515, Competitive Advantage in the Global Economy (CAGE).
    15. Charles R. Hulten, 2018. "The Importance of Education and Skill Development for Economic Growth in the Information Era," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 115-146, National Bureau of Economic Research, Inc.
    16. Speer, Jamin D., 2020. "STEM Occupations and the Gender Gap: What Can We Learn from Job Tasks?," IZA Discussion Papers 13734, Institute of Labor Economics (IZA).
    17. Sue Ling Lai & Hiep-Hung Pham & Hong-Kong To Nguyen & The-Cuong Nguyen & Anh-Vinh Le, 2019. "Toward Sustainable Overseas Mobility of Vietnamese Students: Understanding Determinants of Attitudinal and Behavioral Loyalty in Students of Higher Education," Sustainability, MDPI, vol. 11(2), pages 1-17, January.
    18. Razin, Assaf, 2017. "Global Skill-Based Immigration Policies and Israel's Brain Drain," CEPR Discussion Papers 11903, C.E.P.R. Discussion Papers.
    19. Bächli, Mirjam & Teodora Tsankova, 2020. "Free Movement of Workers and Native Demand for Tertiary Education," Economics Working Paper Series 2019, University of St. Gallen, School of Economics and Political Science.
    20. Kate Choi & Yue Qian, 2023. "Differences in occupational homogamy by race, ethnicity, and national origin: A social mobility strategy for Asian Americans," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 48(18), pages 483-512.

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    More about this item

    JEL classification:

    • 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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