High-Skill Immigration, Innovation, and Creative Destruction

41 Pages Posted: 25 Jul 2018

See all articles by Gaurav Khanna

Gaurav Khanna

University of California, San Diego (UCSD)

Munseob Lee

University of California San Diego

Date Written: June 6, 2018

Abstract

Economists have identified product entry and exit as a key mechanism through which innovation translates into economic growth. In this paper we document how high-skill immigration, under the H-1B visa program, affects product reallocation (entry and exit) at the firm level. We create a new dataset by matching data on H-1B Labor Condition Applications (LCAs) to the retail scanner data on products and Compustat data on firm characteristics. We first document that H-1B certification is associated with higher product reallocation, which in turn is associated with revenue growth. Our results shed light on new channels of innovation by high-skill immigrants and the ensuing consequences for the US economy.

Keywords: H-1B Visa, Product Reallocation, Schumpeterian Growth

JEL Classification: D2, F2, O3

Suggested Citation

Khanna, Gaurav and Lee, Munseob, High-Skill Immigration, Innovation, and Creative Destruction (June 6, 2018). Available at SSRN: https://ssrn.com/abstract=3207942 or http://dx.doi.org/10.2139/ssrn.3207942

Gaurav Khanna

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

HOME PAGE: http://www.econgaurav.com

Munseob Lee (Contact Author)

University of California San Diego ( email )

9500 Gilman Drive
La Jolla, CA 92093
United States

HOME PAGE: http://sites.google.com/site/munseob

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