Importing Knowledge

Nations tend to develop specialties in different areas of science and technology. When one country has exceptional expertise that another lacks, what happens when knowledge workers migrate from the one to the other?

Three Case Studies

Let's start by with some case studies. Moser, Voena, and Waldinger (2014) study (mostly Jewish) German chemists who were dismissed from academic posts in the 1930s when the Nazi's came to power. About 17% of all German and Austrian chemistry professors were dismissed in this way, and of this group 26 appear to have immigrated to the USA. Moser, Voena, and Waldinger identify fields of chemical innovation where the emigrants were strong by looking at their patents. They find US patenting in these areas increased significantly after 1933, when German immigrants began to arrive in America, when compared to the fields in which non-migrating German chemists were strongest.

Half a century later, Russian scientists were migrating to Germany when the Soviet Union collapsed. Ferrucci (2020) uses a similar methodology as Moser, Voena, and Waldinger to study the impact of this influx on German patenting. Ferruci uses Soviet patenting (abroad - there wasn't a patent system within the USSR) to identify fields in which the USSR had comparative technological strength. Broadly speaking, this was in broad technology classes like "physics" and "electricity", rather than chemistry. After 1991, when Russian scientists begin to arrive in Germany, there is an uptick in German patenting in fields of Soviet strength, as opposed to other fields.

Finally, Choudhury and Kim (2018) exploit a quirk of US immigration law to estimate the impact of Chinese and Indian immigration on innovation using traditional herbal knowledge. Many firms would like to hire more knowledge workers from abroad but are constrained by the cap on highly skilled migrant visas issued each year, which was 65,000 per year prior to 1999. In that year, driven by the dot-com bubble, the cap was raised to 115,000 per year, before dropping back to 65,000 in 2004. During the period 1999-2004, firms had greater scope to hire foreign knowledge workers. At the same time, there is a group of firms and other institutions (mostly but not exclusively universities) that are exempt from this visa cap. So Choudhury and Kim compare the patent output of firms that were affected by the visa cap expansion to those that weren't.

They are interested in the traditional herbal knowledge brought to America by Indian and Chinese migrants, so they build a database of patents that disclose the use of herbs in their title or abstract. They find the number of herbal patents sought by firms that get to hire more migrants increases sharply when the visa cap is lifted and drops sharply when the cap is tightened, whereas herbal patenting by exempt organizations does not change.

A General Result

Across time and space, these three case studies all tell the same basic story: when country X has technological strength in a certain area, then country Y gets stronger in that area after scientists and engineers immigrate. It turns out, this story can be generalized beyond just these three special cases.

To see if this trend is general, Bahar, Choudhury, and Rapoport (2020) look at 95 countries and 651 different technological categories. Among other things, they look at the probability that a country experiences a "take-off" in patenting in a particular technology category after it receives more immigrants with strength in that field. Here, a "take-off" is defined as going from zero patents in that field to having a greater than average share of patents in that field. For example, if the typical country has 5% of it's patents in nanotechnology, a country that goes from having 0 nanotechnology patents to more than 5% of it's patents in nanotechnology is one that experiences a take-off. It signifies going from 0 to an “above average” national focus on that technology.

Take-offs are rare. Over the course of a decade, the probability a given technology field in a given country experiences a take-off is just 2.2%. But Bahar, Choudhury, and Rapoport estimate doubling the number of immigrants who come from countries that are strong in a particular field raises this small probability by nearly a quarter, to 2.7%. And note that "doubling" the immigrant population isn't an unreasonable goal - the typical number of immigrants strong in a particular technology field is just 24.

These results are not driven by one or two countries. They appear to be general. But we might also worry that this is a spurious correlation. For example, if a country is planning to pump a bunch of resources into nanotechnology, then it might pull in immigrant scientists who are also experts in nanotechnology. That might make create a correlation between immigration and subsequent take-off, but it might be that the take-off would have happened regardless of the immigration (since they were pouring money into the field anyway).

So what you want to do is separate out immigration that’s pulled in by these possible technology opportunities from immigration that happens for other reasons. One approach they take is to exploit variation in the number of immigrants that is driven historic immigration trends, since the pull of family (not technology policy) drives a lot of immigration decisions. When they do this, they get results that are consistent with their earlier "naive" estimates.

Bigger Than Expected Impact

So this looks to be a more general point: if you want to develop innovative capacity in a new field, one way to do that is to bring in people from abroad who already have expertise in that area. Not too surprising! What is surprising is the size of the effect: it's frequently bigger than the direct contributions of the immigrants themselves.

In Moser, Voena, and Waldinger’s study of German chemists fleeing Nazi Germany, 157 US chemistry patents can be directly attributed to these migrants. But after we exclude those patents, the number of US patents in fields of where German immigrants were strong nearly doubled after their entry, from about 150 to 290 per year per class. In contrast, the number of patents in technology classes where non-immigrating German chemists were strong only rose from 220 to 250 per year.

In Choudhury and Kim’s study of Indian and Chinese migrants, the number of new herbal patents increased from under 20 per year to more than 50 per year for firms that were able to hire more migrants. And yet, herbal patents from inventors with typically Chinese and Indian names (which they read off the patent documents) only increased by at most 15 per year. And the annual number of herbal patents remained higher when the number of visas dropped back down to 65,000: while it fell, it didn’t return to pre-1999 levels. The immigration appears to have triggered an increase in herbal patenting that extended beyond the activities of the guest workers.

At least in these two cases, the effect of immigration on innovation was greater than the direct contributions of the immigrants themselves (we don’t know who is responsible in the other studies, but we'll see later this is probably a general point too). One reason this is surprising is that we might expect talented immigrant inventors to displace less talented American inventors. That would tend to mean the net effect of immigration would be less than the direct contributions of the immigrants themselves, since it would induce a decline in patenting by US-born inventors.

And in fact, this appears to happen! Moser, Voena, and Waldinger also look at the fate of Americans who are patenting in areas of German chemical strength prior to the arrival of the Germans. These guys were indeed less likely to patent in the same areas after the influx of talent in these areas. Instead, the rise in patenting seems to have come mostly from new inventors in the field.

Similarly, Ferrucci looks at what happens to German inventors who were previously active in fields of Soviet strength. After they collaborate with Russian immigrant scientists Ferrucci finds they are more likely to change the technological fields where they work.

So maybe immigrants bring in new and better knowledge, and that tends to make the knowledge of incumbents obsolete. The thing about knowledge though is that it spreads from mind to mind. What was once the advantage of an immigrant slowly becomes the advantage of all.

Seeds of Knowledge

You can see evidence of this in a few places. Bernstein et al. (2019) cleverly infer the immigration status of hundreds of thousands of US patentees by matching them (via their name and address) to the Infutor database. This database includes the birth year of millions of people, and a fragment of their social security number. Because social security numbers are disbursed according to a known formula, the authors can use the social security fragment to infer the year the number was assigned to a patentee. And since they also know the year you were born, they can infer the age you were when you received your social security number. Most US-born citizens are assigned a social security number when they are born or when they work their first job, typically as teenagers. They show the vast majority of people who are assigned a social security number in their 20s are people who immigrated to the USA.

Armed with evidence on the migration status of tons of inventors, they show the patents of immigrants are a bit more likely to cite foreign patents than the patents of US-born inventors. Specifically, the share of citations to foreign patents is about 3 percentage points higher for immigrant inventors. If we trust patent citations are signals of actual knowledge transfer (and they probably are, at least a bit), then immigrants incorporate knowledge of foreign work into their own inventions at a higher rate than US-born inventors.

And that knowledge probably transfers to US-born inventors. Most patents involve teams of inventors, and more than half of the inventors that immigrants work with are not themselves immigrants.

Another paper looks in more detail at the effect of immigrants on citations, but in the context of academic work, rather than patents. That may actually be better than the data on patent citations though, since there are some potential issues with patent citations that are not present for academic work. Ganguli (2015) also studies the collapse of the USSR, but looks at how citations to Soviet research changes when Russians migrate to the USA. She has two main approaches.

In the first, she looks at how many citations are made to Soviet-era scientific literature by the non-Russian residents of different US cities before and after the collapse of the USSR. On average, for each newly arrived Russian immigrant scientist, a city makes another 8 citations (per year) to Soviet-era scientific literature. So the idea here is that these immigrants moves to a US city and the residents there learn about this Soviet era research that was out there but unknown to them.

Second, she looks at how migration affects citations received by an individual scientific article. She matches migrating scientists to a set of control scientists who are similar along a bunch of dimensions and looks to see what happens to the citations their Soviet era work receives from US (again, non-Russian) residents after they migrate. The effect is small, but it's there: migration buys each of your papers about 0.03 extra cites per year from US researchers, relative to the control group that didn’t migrate.

Access to new knowledge for domestic inventors is one way the innovation impact of immigration may be so big. Another is via the combination of existing and new knowledge. To the extent that innovation is about the combination of old ideas in new ways, teams composed of immigrant scientists and US-born scientist with different knowledge may be able to create innovations unavailable to either group on their own. Choudhury and Kim finds evidence of this: patents that mention both an herbal compound and a synthetic compound (for which the US pharmaceutical industry is presumed to have a comparative advantage) are more commonly invented by teams comprised of both immigrants and US-born workers, as compared to teams comprised entirely of immigrants or US-born workers.

To close, let's look at a grim but illuminating study. As noted above Bernstein et al. (2019) have constructed a unique dataset of US inventors who migrated to the USA no earlier then their 20s. Though this group is only 16% of inventors in their dataset, they account for 22% of all patents over 1976-2012 (and an even larger share, when you attempt to adjust for the quality of patents). So the direct contribution to innovation of this group is already quite large. But they additionally seem to have a large and positive effect on their US collaborators.

To show this, the authors look at what happens to an inventor's collaborators (the other inventors they are listed on patents with) when the inventor suffers an early death, where an early death is one that occurs prior to the age of 60. For every inventor who dies early, they match them to a second inventor who did not die early, but was similar to the deceased in other ways up to that point in their life: immigration status, age in the year of death, patenting history, number of co-inventors, etc. Now they have two inventors who are similar in a lot of ways, except one of them died early. They then identify all the collaborators of these people and look to see what happens to them in the years after one inventor dies and another lives. They find those who previously worked with the deceased take out fewer patents every year, as compared to those who worked with a similar inventor who did not die.

But when they split their results up by immigration status, they find the effect is stronger for immigrants. On average, when an immigrant collaborator dies early, US inventors produce 0.4 fewer patents per year thereafter, compared to those whose coauthor did not die. This effect lasts for at least a decade, and seems to get stronger over time. For comparison, US inventors working with a non-immigrant inventor produce 0.1 fewer patents per year after the inventor passes away.

In other words, US inventors benefit a lot from the ability to collaborate with immigrant inventors. And one way to see that is to see how many fewer patents they take out when they lose the ability to collaborate (or even just talk with) that inventor.

So why is the impact of immigration on innovation so much greater than the activity of the migrants themselves? My take is that part of the story is the knowledge and ideas the migrating scientists learned in their home countries comes along for the ride, and then sets up house in the minds of the native born.