The contributions of immigrants

As a student of Spanish in the United States and now as an expatriate in China, I’ve been interested in the struggles of immigrants, their impact on society, and the heated debates over immigrant policy. China is trying hard to attract skilled immigrants from abroad while also creating enough jobs for the millions of low-skilled internal migrants moving to the developed eastern cities.

In the United States, H-1B visas for highly educated immigrants are difficult to obtain. More barriers to immigration were erected after the terrorist attacks in 2001 and even the first bank bailout last year restricted bank on hiring H-1B visa holders. These visas are limited and not easy to obtain.

[H-1B] visas are valid for up to six years. If a worker on an H-1B visa wants to stay permanently, he has to apply for a permanent resident visa. These visas are in very short supply and can take more than a decade to obtain. While they wait for permanent residence, some H-1B workers get paid below-market salaries and endure many other hardships.

But we should reexamine how important skilled immigrants are to scientific innovation, higher education, and economic growth.

Immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant inventors crowd out native inventors, or an underestimate if immigrants have positive spill-overs on inventors. Using a 1940-2000 state panel, we show that immigrants do have positive spill-overs, resulting in an increase in patents per capita of 9-18% in response to a one percentage point increase in immigrant college graduates.

One way to look at educated immigrants on H1-B visas is to view them as human capital subsidized by their home countries.

Most of the workers who immigrate to the U.S. each year have at least a high school diploma, while about a third have a college education or better. Since it costs, on average, roughly $100,000 to provide 12 years of elementary and secondary education, and another $100,000 to pay for a college degree, immigrants are providing a subsidy of at least $50 billion annually to the U.S. economy in free human capital. Alternatively, valuing their contribution to the economy by the total wages they expect to earn during their lifetime would put the value of the human capital of new immigrants closer to $200 billion per year. Either the low or high estimate would make the current account deficit look smaller.

Immigrants provide crucial skilled labor for not only the science and technology industries, but also the military and intelligence agencies.

[A] new effort, for the first time since the Vietnam War, will open the armed forces to temporary immigrants if they have lived in the United States for a minimum of two years, according to military officials familiar with the plan.
Recruiters expect that the temporary immigrants will have more education, foreign language skills and professional expertise than many Americans who enlist, helping the military to fill shortages in medical care, language interpretation and field intelligence analysis.
…
The American Army finds itself in a lot of different countries where cultural awareness is critical,” said Lt. Gen. Benjamin C. Freakley, the top recruitment officer for the Army, which is leading the pilot program. “There will be some very talented folks in this group.

The New York Times profiled a high school in a northern Virginia school district that has received an influx of immigrants in the last decade. Bringing non-native English speakers up to a functional level of English and integrating a diverse student body presents many challenges.

The map alongside the article, showing the number of immigrants from different countries during different decades is worth checking out.

Most groups are highly concentrated on the coasts, save for northern and central Europeans who congregated in the Midwest during the late 19th and early 20th centuries.

The big debate today is whether the current wave of immigrants from Mexico is different from previous immigrations. Some of the reasons that cause the greatest alarm are the fact that Mexican immigrants are the only group originating from a neighboring county (Canadian immigration has always been minimal) and the only one with a historical claim to U.S. territory. The map also clearly shows that the number (and geographical reach) of Mexican immigrants far surpasses any previous group of immigrants.

[UPDATE] Another article on America's immigration policy and how it is hurting high-tech companies that want to hire the best talent.

The limit [of H-1B visas] was raised twice as the technology sector boomed, to 115,000 in 1999 and to 195,000 in 2001. But those temporary increases were not renewed for 2004, and the number of H-1B visas reverted to 65,000. (There are an additional 20,000 H1-B’s for people with graduate degrees from American universities.)

Since 2004, there has been a growing gap between the number of H-1B visas sought and those granted, through a lottery. In 2008, companies made 163,000 applications for the 65,000 slots. Google applied for 300 of them; 90 were denied.
...
Many innovators in Silicon Valley come from overseas; 42 percent of engineers with master’s degrees and 60 percent of those with engineering Ph.D.’s in the United States are foreign-born.

Foreigners also spur innovation by broadening understanding of consumers abroad. For instance, on the advice of Chinese-born workers, Google dotted its mobile maps for China with fast-food restaurants, which locals use as navigational landmarks.