Foreign STEM Workers and Native Wages and Employment in U.S. Cities

Giovanni Peri, Kevin Y. Shih and Chad Sparber

No 20093, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Scientists, Technology professionals, Engineers, and Mathematicians (STEM workers) are fundamental inputs in scientific innovation and technological adoption, the main drivers of productivity growth in the U.S. In this paper we identify the effect of STEM worker growth on the wages and employment of college and non-college educated native workers in 219 U.S. cities from 1990 to 2010. In order to identify a supply-driven and heterogeneous increase in STEM workers across U.S. cities, we use the distribution of foreign-born STEM workers in 1980 and exploit the introduction and variation of the H-1B visa program granting entry to foreign-born college educated (mainly STEM) workers. We find that H-1B-driven increases in STEM workers in a city were associated with significant increases in wages paid to college educated natives. Wage increases for non-college educated natives are smaller but still significant. We do not find significant effects on employment. We also find that STEM workers increased housing rents for college graduates, which eroded part of their wage gains. Together, these results imply a significant effect of foreign STEM on total factor productivity growth in the average US city between 1990 and 2010.

JEL-codes: F22 J61 O33 R10 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-ino, nep-lab and nep-ure
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