Skilled Immigration, Innovation and Wages of Native-born American

The paper examines the effects of skilled immigration on US wages that are due to innovation. We extend the studies by Hunt & Gauthier-Loiselle (2010), and Hunt (2011) to explore the immigration-innovation-wages nexus. Using the National Survey of College Graduates (NSCG) and the US Census datasets we find a significant positive effect of immigration on wages that are attributable to immigrants‘ contribution to innovation. Our findings suggest that as the share of skilled immigrants increases in a particular group, the wages of both natives and immigrants in that group get a positive boost. The effects are more pronounced through immigrants‘ impact on patent granted and patent commercialized, compared with their impact on other measures of innovations. The results also show that the immigrants are more likely to present a paper at a conference or publish in professional journals, primarily because they are more educated or concentrated in the related occupation compared to the natives. Our findings indicate that immigrants make a substantial contribution to the host economy‘s innovation which is a major driver of productivity growth.