Working Paper: NBER ID: w24824
Authors: Gaurav Khanna; Munseob Lee
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.
Keywords: High-Skill Immigration; Innovation; Product Reallocation; Creative Destruction
JEL Codes: D22; D24; F22; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| H-1B certification (J68) | product reallocation rates (F16) |
| H-1B certification (lagged) (J68) | future product reallocation rates (F16) |