High-skilled immigration benefits scientific progress, new research shows

The political debate often ignores potential benefits from attracting high-skilled immigrants. This stems in part from the difficulty inherent in measuring potential benefits from high-skilled immigration. These benefits (and potential costs) may only occur years after immigrants have arrived in the country. Furthermore, immigrants like to settle in booming areas. As a result, comparing the economic outcomes in areas with more immigration to outcomes in areas with less immigration does not provide an accurate measure of the true effect immigrants have on the local economy.

My recent research with colleagues, Petra Moser and Alessandra Voena, investigates and measures the true, long-run effects of high-skilled immigration by analysing decades-old data from the World War II period. Our work examines the effects of high-skilled chemists who were expelled from Nazi Germany and moved to the United States. Our research looks at the impact this group of immigrants had on patents granted in the United States over several decades, and, as such, it provides the first systematic, empirical analysis of the effects of German Jewish émigrés on US innovation.

Starting in 1933, the Nazi government dismissed all university researchers of Jewish origin. As a result, some of the best chemists in the world were forced to migrate to other countries. Many of them chose to settle in the United States. Our study analyses how the arrival of these high-skilled immigrants affected patenting of US inventors over a long period of time.

Historical accounts suggest that Jewish émigrés from Nazi Germany revolutionised US science. By 1944, more than 133,000 German Jewish émigrés found refuge in the United States. In physics, émigrés such as Leo Szilard, Eugene Wigner, Edward Teller, John von Neumann, and Hans Bethe formed the core of the Manhattan project that developed the atomic bomb. In chemistry, the work of émigrés created “hardly less than a revolution… their work on the structures of proteins and amino acids, on metabolic pathways and genetics, almost immediately propelled the United States to world leadership in the chemistry of life,” as Howard Sachar, author of A History of Jews in America put it. At the same time, however, other accounts suggest that the émigrés’ contributions were reduced by the administrative hurdles and anti-Semitism they faced at the time.

To measure the impact of one specific group of immigrants in the period – the chemists – we collected a new, inventor-level data set of changes in US patenting. Our analysis of the data shows that these high-skilled chemists substantially increased patenting by US inventors for about 20-30 years after their arrival. This increase was driven, not by an increase in patenting by US chemists who had previously worked in these fields, but an inflow of other chemists into the émigrés’ research specialties. The émigrés attracted a new group of domestic US inventors to their fields.

Because immigrants often choose to settle in booming areas, a simple comparison of locations with and without immigrants could overstate any positive effects from immigration. To avoid these problems, we compared the changes in patenting by US inventors in research fields that benefited from the migration of a German-Jewish chemist to changes taking place in research fields that were dominated by German chemists who did not migrate to the United States.

Of course, the United States may have attracted only those chemists who were working in fields that were growing particularly quickly. To address this concern, the study also compared changes in patenting by US inventors in the pre-dismissal research fields of émigrés. Because these migrants were not planning to migrate and only did so after they were dismissed from their university positions in Nazi Germany, their pre-dismissal work was not geared toward research fields that were booming in the United States.

Our findings provide empirical evidence for historical accounts suggesting that immigration sparked a US revolution in science and immigration, and they show that high-skilled migrants can have large positive effects on innovation. The positive effects of the migrants stemmed largely from their ability to attract new researchers into their areas of specialties. Native researchers who had already worked in these same fields, however, did not become more innovative. As a result, our work may suggest one reason why some native, high-skilled workers may not necessarily support the inflow of high-skilled migrants – even though this kind of migration can have very large positive effects on innovation as a whole.