American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Immigration, Innovation, and Growth
American Economic Review
(pp. 828–61)
Abstract
We propose a novel identification strategy to isolate exogenous immigration shocks across US counties, by interacting quasi-random variations in the composition of ancestry across counties with the contemporaneous inflow of migrants from different countries. We show a positive causal impact of immigration on local innovation and wages at the five-year horizon. The positive dynamic impact of immigration on innovation and wages dominates the short-run negative impact of increased labor supply. A structural estimation of a model of endogenous growth and migrations suggests the increased immigration to the United States since 1965 may have increased innovation and wages by 5 percent.Citation
Terry, Stephen J. ⓡ Thomas Chaney ⓡ Konrad B. Burchardi ⓡ Lisa Tarquinio ⓡ Tarek A. Hassan. 2026. "Immigration, Innovation, and Growth." American Economic Review 116 (3): 828–61. DOI: 10.1257/aer.20211601Additional Materials
JEL Classification
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J22 Time Allocation and Labor Supply
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- O31 Innovation and Invention: Processes and Incentives
- R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics