Economic Impacts of High-Skilled Immigration

Antti Kauhanen and Jed DeVaro

No 140, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract This brief examines the economic impacts of skilled immigration on firms, innovation, and labour markets. Research shows that skilled immigration generally has positive effects on firm performance, productivity, and innovation. Immigrant inventors play a crucial role in innovation, with evidence showing they produce a disproportionate share of patents and have positive spillover effects on native collaborators. Contrary to common fears, most studies find that skilled immigration does not negatively impact native workers’ wages or employment on average. In fact, it can benefit natives with complementary skills. The availability of skilled immigrant labour also influences firms’ location decisions, with restrictions on immigration leading to increased offshoring of jobs. While the fiscal impacts of immigration are debated, traditional accounting methods suggest a positive fiscal impact for highly educated immigrants. However, these estimates often fail to account for indirect effects like productivity gains and innovation. Overall, the evidence indicates that skilled immigration is a valuable tool for addressing productivity challenges and innovation needs, particularly in countries facing declining working-age populations.

Keywords: Productivity; Innovations (search for similar items in EconPapers)
JEL-codes: D24 J31 J61 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2024-10-28
New Economics Papers: this item is included in nep-bec, nep-eff, nep-int and nep-ure
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Related works:
Working Paper: Economic Impacts of High-Skilled Immigration (2024)
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