Immigration Powers American Progress

February 8th 2022


Any postmortem on how the United States handled COVID-19 will find plenty to criticize about the U.S. preparation and response. But delivery of multiple safe and effective vaccines in less than nine months is universally recognized as our most important success. And that achievement wouldn’t have been possible without America’s greatest resource: our ability to attract talent from around the world, integrate them into the world’s largest economy, and let them collaborate and share ideas in the world’s most intellectually productive talent clusters. 

What would the mortality statistics look like if mRNA pioneer Katalin Karikó had not moved here in 1985? If she had had to face today’s byzantine immigration process, she likely would not have been able to.

Just five years after she moved here, the United States established a ceiling on the number of skilled temporary workers allowed to come to the United States. Though universities like those who employed Karikó are exempted from the caps, further changes came in 1998 that would have barred Karikó from coming on an H-1B based on the details of her initial job offer. Even if she found another path here, it would undoubtedly have set her research back years, and mRNA development more generally. 

It’s not just COVID-19. From the Civil War to the space race, the United States has frequently relied on its ability to attract and deploy immigrant talent during times of crisis. The world would be a very different place if Nazi Germany had been better at retaining top talent in nuclear physics and the United States had been worse at attracting it. 

We cannot predict with certainty which research will save lives, avert disasters, or promote human flourishing decades in the future. What we can do is prepare for a wide range of possibilities as best we can by fostering a diverse and flourishing ecosystem of research.

A thriving innovation ecosystem depends on the ability to draw on the world’s talent to work on groundbreaking and pressing problems. That ecosystem is at risk of withering as we’ve complacently let our immigration system collapse. What future crises will we be less prepared for because of current failures of our immigration system?

Waiting times for green cards have skyrocketed and are only accelerating. The number of applicants stuck in immigration backlogs has grown into the millions. Leading minds from India and China face the longest waiting times for green cards and are increasingly giving up on the United States altogether.

If we let our failures on immigration strangle America’s potential to drive future progress, it’s possible that the world’s knowledge network could reconfigure around another country. But even if it reemerged just as productive—an unlikely prospect unless U.S. researchers could be induced to emigrate en masse—it would face numerous disadvantages when compared to current U.S. leadership. If a smaller liberal democracy like Canada or Australia takes over as the top destination for talent, the world’s ability to develop cutting edge technology will be hampered by the fact that our leading thinkers and scientists will be working outside of the world’s largest economies. And if a country like China manages to turn its rising average income into a magnet for international talent for the first time in its history, we run the risk of scientific breakthroughs being applied primarily as a tool of authoritarianism.

To be prepared for the challenges the future will inevitably bring, we must understand the central role that immigration plays in driving our progress. And we must rethink our immigration policies accordingly. 

Immigrant talent and progress

Across the economy, it takes more researchers today to achieve progress on scientific and technological problems than in the past. If we are going to increase growth, we will somehow need to make individual researchers more productive or increase the number of people working on cutting edge problems and coming up with new ideas. 

Immigration policy offers the potential to accomplish both. The United States has been the most attractive destination in the world for migrants for such a long time that we have grown complacent about it. Even as productivity has slowed and the need for migrants has increased,  U.S. immigration policy has remained stagnant for decades. Attracting and retaining superstar talent from around the globe to jumpstart the American productivity engine will require retooling the immigration system. 

There are basically two mechanisms by which immigration can grow the economy. The obvious way is that immigration increases the supply of workers. Here, immigration is akin to international trade: labor is an input in production, so more labor means more output. If we allow more people to move here to, say, pick fruit or program software, it’s no surprise that more fruit gets picked or more software gets programmed. This is the standard frame in which immigration policy is discussed: labor shortages, “jobs Americans won’t do,” and wage effects all conceptualize immigration as primarily about labor. But thinking about immigration primarily in terms of labor markets misses the biggest potential gains from migration.

The “more labor, more output” mechanism doesn’t affect the rate of economic growth. It can deliver major improvements for immigrants themselves, who are made much more productive by moving, but will neither sustainably increase the standard of living in the long run for the destination country nor accelerate technological advancement. For scientific, technological, and economic (not to mention artistic) progress, responding to labor market needs is of secondary importance to fostering innovation. 

That’s where the second, much more powerful effect of immigration comes into play. Immigrants aren’t only inputs into the economic machine — they make the economic machinery more productive, able to produce more output for the same number of inputs. Thinking of immigration like trade can make us forget that immigrants aren’t only workers; they are also researchers, innovators, and entrepreneurs. They help transfer technologies and develop new ones. 

Increased immigration doesn’t only provide more minds to work on problems, immigrants are disproportionately drivers of innovation and disproportionately likely to be superstars. Research by Jennifer Hunt shows immigrant scientists and immigrant-led teams produce higher impact papers than natives and native-led teams. Only 14% of the U.S. population is foreign-born, but foreign-born migrants to the United States are responsible for 30% of U.S. patents, 31% of U.S. Nobel Prizes, and 44% of founders of U.S. unicorn companies.

The outsized role of immigrants in the history of science and technology is not a new phenomenon and was arguably even stronger in ages of more rapid progress. Robert Gordon, a leading scholar of American growth and stagnation observes that “the role of foreign inventors in the late nineteenth century was distinctly more important than it was one hundred years later.” In the twentieth century, immigrants ran the U.S. space program, drove the Manhattan Project, and invented the helicopter and television. Hungarian-Americans made such outsized contributions to science and mathematics that it was said they must have come from Mars rather than Hungary. Outside the United States, physics was revolutionized by immigrants like Albert Einstein and Wolfgang Pauli who were drawn to cosmopolitan talent hubs like Zurich.

Immigrants’ outsized contributions to science and progress go back even further. The work of French Huguenot refugees like Denis Papin and Jean Desaguiliers helped lay the groundwork for the industrial revolution in England. In the first 50 years of the British patent system, a staggering 38% of British patents belonged to alien inventors. And immigrants played a disproportionate role in developing and advancing early modern science. For instance, immigrants made up at least five times more of the original fellows of the Royal Society (itself a successor organization to the immigrant-founded Gresham College group and Hartlib Circle) than they did of the population of the British Isles. One of those immigrants, Henry Oldenberg, established the practice of scholarly peer review. 

Countries at the frontier of technological, scientific, and economic development are naturally magnets for the top talent from around the world. The frontier is the attractive destination for those most eager to work in places exploring cutting edge problems, with others who are pushing the boundaries of knowledge, or to build successful organizations. Risk-taking immigrants don’t just bring their good ideas with them, they work with natives to recombine ideas from both their home and destination countries in novel ways. 

This actually understates the benefits from attracting immigrant talent because immigrants don’t only contribute directly, they generate spillovers that make the teams they work on and the cities they live in more productive. One team of economists has estimated that immigrants are directly responsible for 30% of American innovation (as measured by patent citations) since 1976 and a whopping 73% after accounting for how immigrants have improved the productivity of the natives they collaborate with. And, their global impact may be greater still once we consider that they also foster the adoption of new technologies in their countries of origin. 

The United States is lucky to be the most desired destination for talent from around the world. But our restrictive immigration system is increasingly preventing us from making full use of that opportunity.

America’s complacency about immigration

The American immigration system was designed before the slowdown in productivity growth began in the 1970s. The structure of the U.S. immigration system essentially looks the same today as it did in 1965 with the passage of the Hart-Cellar Act. New immigrant categories established since 1965 comprise only about 5% of total immigration. No major permanent updates to visa caps have passed since 1990. The most significant changes in the American Competitiveness and Workforce Improvement Act and the American Competitiveness in the 21st Century Act were temporary. And, the increase in the H-1B Reform Act of 2004 was a drop in the bucket, adding only 20,000 visas to cushion a 130,000 visa cut.

In short, the United States remains stuck with the basic immigration system it had 50 years ago, with the immigration caps of 30 years ago. As productivity growth has slowed and more minds are needed today to achieve the same amount of progress, the United States has been complacent about making any significant immigration reforms to better tap the great reserve of talent eager to move here. 

We were able to coast for a while, but the longer we’ve been complacent, the more dysfunctional our immigration has gotten. Even as the U.S. population has grown, the number of green cards issued per year peaked back in 1991. Further, many visa categories have become essentially unusable as backlogs have grown out of control. The Congressional Research Service estimates that an Indian professional with an advanced degree can expect to wait 195 years for a green card if they apply today. The contributions of Indian researchers have fallen into decline as these restrictions have deterred and blocked many of the most promising would-be-immigrants. Even if all country-specific caps were eliminated, the waiting time for employment-based green cards for professionals with advanced degrees would still be 37 years by 2030.

While the United States has rested on its laurels, other countries have cut into its lead. In 2000, the United States had been the destination for more than half of all the world’s immigrants over the previous five years. By 2019, the United States was the destination for only 11%. Meanwhile, Australia for instance managed to capture an increasing share of the world’s migrants, nearly doubling its share over the same period. 

This is no chauvinistic lament because the race for talent isn’t zero-sum. All else equal, it tends to be better for the world if an immigrant moves to the United States instead of Canada, Australia, or the UK. First, foreigners themselves would prefer to move to the United States more than any other country. Second, it’s not just better for immigrants themselves; moving to the United States makes immigrants more productive compared to moving elsewhere, even to an advanced economy like those of America’s competitors. One study using scores in the International Math Olympiad to control for observable talent as a teenager finds that budding mathematicians who choose to move to the United States are two to three times more productive than migrants to the U.K. The agglomeration effects of moving to the major talent clusters in the United States seemingly can’t be replicated in London, Toronto, Vancouver, Sydney, or Melbourne. 

The world’s most successful universities, firms, intellectual circles, and teams are located in the United States. This is not to say there aren’t world class institutions and stellar teams abroad. But, there is nevertheless a significant difference between being able to collaborate with scholars at a top department in the United States vs top departments in Canada or Australia, or between starting a company in the United States vs outside it. For superstar talent at the far right hand tail of the talent distribution, other countries don’t offer the same opportunities as the United States, either for immigrants themselves or for advancing human progress. 

The future of immigration policy

Reversing the slowdown in productivity growth will require both a lot more immigrants and better policies to actively recruit and retain the world’s superstar talent.

The United States has the largest foreign-born population among OECD countries, but as a percentage of its population, it is remarkably closed off. All but a few OECD countries accept more permanent immigrants each year as a share of their populations. More than ten, including Canada, Australia, and New Zealand, let in at least twice as many. 

But our self-imposed scarcity of immigrants is only one part of the story. The US lets in only about 20% as many permanent immigrants in employment categories (including their accompanying family members) as it does in family categories. Meanwhile, the OECD average is over 45%, which may also help explain why other OECD countries are able to politically sustain higher rates of immigration in the first place.

The United States has coasted with an immigration system that was not designed to maximize the potential for growth. The United States has done fairly well given this limitation, largely by outsourcing admissions decisions to employers, universities, and families, and relying on the inertia of having the world’s top talent clusters to do the work of attracting people. 

Relying on employers and colleges can go a long way, but even when they do a good job identifying and recruiting talent, restrictive visa rules often make it difficult to retain that talent. For example, America’s largest recruitment program for new high-skilled migrants, optional practical training (OPT), lets 2-3 times as many migrants start careers in the United States than our temporary worker programs allow to stay. The effect is that even when we can identify talent, we kick much of it back home after just a few years.

Be that as it may, the incentives of sponsoring organizations are also not always aligned with getting the most from immigration. Employers often have an incentive to sponsor experienced workers who will stay with their firm rather than early career risk-takers. And firms are naturally most interested in immigrants’ potential as workers rather than innovators or entrepreneurs who may disrupt their industries. Colleges and universities are not particularly interested in the positive impact international students have on innovation and don’t have an incentive to recruit and offer admission to promising foreigners who can’t afford tuition. Only seven U.S. institutions of higher education meet full demonstrated need for international students. 

A more proactive United States would not only increase the quantity of immigration; it would proactively attract and recruit promising talent from around the world. It would invest in capacity to process and adjudicate visa applications quickly and efficiently. It would establish and aggressively market a startup visa for entrepreneurs to found businesses here. It would expand opportunities for international education to the world’s most promising students regardless of their financial background, ensure the most promising international students can stay after graduation, and actively encourage them to build their careers here. It would streamline, prioritize, and encourage immigration of experts in fields likely to power growth like AI, quantum computing, and biotechnology. And it would take risks in the pursuit of superstars instead of adopting an overly cautious system that may raise the median skill level of immigrants but thin the ranks of superstar outliers. 

While immigration policy has a deserved reputation for political gridlock, there are nevertheless underrated possibilities for significant improvements that are politically feasible. 

In Congress, after many attempts at comprehensive reform have floundered, lawmakers are increasingly open to addressing narrower aspects of the immigration system, which opens promising opportunities. For instance, adding new immigrant cap exemptions for top talent or for people stuck in interminable backlogs or expanding existing exemptions for H-1Bs to private sector research institutions would be momentous reforms that could nevertheless be uncontroversial enough to have a hope of passage. Reforms targeted specifically toward recruiting STEM talent and entrepreneurs are likewise promising. 

While executive reforms are risky since they can be reversed by later administrations (or overturned by the courts if they are too aggressive), they can also prove surprisingly sticky—and still may be worthwhile even if they later get reversed. For instance, OPT began through executive action and remains America’s largest recruitment program for high skilled talent. The executive branch has enough discretion to pass significant reforms like expanding the uncapped O-1 visa for migrants of extraordinary ability, expanding OPT to better retain international students, allocating H-1Bs to the most talented applicants, or expanding the use of J visa waivers to let more temporary visitors stay. 


Support for increasing immigration has never been higher. But, in Congress, the twenty-year strategy of making any and all immigration reform conditional on changes to the most politically polarized immigration issues has led to no reform rather than any “grand bargain” for comprehensive reform. 

A focus on attracting international talent is less polarized and more neglected than hot-button issues like border enforcement and illegal immigration. Improvements in bringing in talent can generate a virtuous cycle by raising support for immigration. Support for immigration is higher when it’s apparent that immigration is benefitting natives. And around the world, countries with higher-skilled immigrant compositions accept more immigrants and have greater public approval of immigration.

The opposite dynamic is currently at play. Our stagnant immigration system is actively repelling top talent, which feeds skepticism about immigration. The ability to attract global talent has always been one of the United States’s most powerful resources, to the great benefit of the world. We run the risk of losing it.