High-Skill Immigration, Innovation, and Creative Destruction

42 Pages Posted: 16 Jul 2018 Last revised: 1 May 2021

See all articles by Gaurav Khanna

Gaurav Khanna

University of California, San Diego (UCSD)

Munseob Lee

University of California San Diego

Date Written: July 2018

Abstract

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.

Suggested Citation

Khanna, Gaurav and Lee, Munseob, High-Skill Immigration, Innovation, and Creative Destruction (July 2018). NBER Working Paper No. w24824, Available at SSRN: https://ssrn.com/abstract=3214370

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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