NATIONAL BUREAU OF ECONOMIC RESEARCH
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High-Skill Immigration, Innovation, and Creative Destruction

Gaurav Khanna, Munseob Lee


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book The Roles of Immigrants and Foreign Students in U.S. Science, Innovation, and Entrepreneurship, Ina Ganguli, Shulamit Kahn, Megan MacGarvie, editors
Conference held April 27, 2018
Forthcoming from University of Chicago Press

Economists have identified product entry and exit as a primary channel through which innovation impacts economic growth. In this paper, we document how high-skill immigration affects product reallocation (entry and exit) at the firm level. Using data on H-1B Labor Condition Applications (LCAs) matched to retail scanner data on products and Compustat data on firm characteristics, we find that H-1B certification is associated with higher product reallocation and revenue growth. A ten percent increase in the share of H-1B workers is associated with a two percent increase in product reallocation rates – our measure of innovation. These results shed light on the economic consequences of innovation by high-skill immigrant to the United States.

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This chapter first appeared as NBER working paper w24824, High-Skill Immigration, Innovation, and Creative Destruction, Gaurav Khanna, Munseob Lee
 
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