The Outsize Role of Immigrants in US Innovation

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Immigrant inventors are key contributors to innovation in the United States, both through their direct productivity and through the spillover effects of their work with native-born collaborators. While accounting for just 16 percent of all US-based inventors, immigrant inventors produce nearly a quarter of total innovation output as gauged by the number of patents and patent citations and the economic value of the patents.

Those are among the findings Shai BernsteinRebecca DiamondAbhisit JiranaphawiboonTimothy McQuade, and Beatriz Pousada report in The Contribution of High-Skilled Immi­grants to Innovation in the United States (NBER Working Paper 30797). The researchers compare the impacts of immigrant inventors with those of their native-born peers between 1990 and 2016. Their study identifies immigrants as individuals who were assigned Social Security numbers at age 20 or older.

Immigrant inventors account for almost one quarter of US innovation, but a substantially smaller share of the inventor population.

Immigrants produced 23 percent of all patents over the study period. If the patents are quality-weighted in proportion to the number of forward citations they receive, the immigrant contribution is 24 percent. It is even higher, 25 percent, when patents are weighted using the value of the stock market reaction to their being granted. Immigrants also collaborated with native-born inventors on 13 percent of all patent filings, so they were either directly or indirectly responsible for 36 percent of US patent output during the study period.

Two factors explain about 30 percent of the patenting gap between immigrants and natives. First, immigrants disproportionately live in innovation hubs, counties that have high rates of patent productivity. Second, immigrants tend to patent in sectors that are changing rapidly. They generate more than 25 percent of innovative output in the computer, communications, electronics, and medical fields, but just 15 percent in older technologies such as metalworking, transportation, and engines. The researchers suggest this indicates that immigrants are more prepared than natives to make sectoral choices that improve their innovative output.

To compare the benefits of working with foreign-born versus US-born innovators, the researchers examined the patenting activity of inventors following the premature death of collaborators, defined as death before age 60. Co-inventor productivity dropped 17 percent after the death of an immigrant, compared with 9 percent after the death of a native inventor.

Immigrant inventors play a disproportionate role in the international exchange of knowledge. Compared with native-born inventors, immigrants are 10 percent more likely to cite work in other countries in their patents and twice as likely to collaborate with foreign inventors. Foreign inventors are also 10 percent more likely to cite patents of US-based immigrants than of US natives.

Contrary to concerns that language and cultural barriers isolate immigrant inventors, immigrants have more collaborators on average than native inventors. Their initial patents are more likely to reflect joint work with other immigrants, but that pattern decays as they assimilate.

— Steve Maas