INCLUSIVE WORKPLACES: Does Immigration Create Jobs?
Monday, October 23, 2017

A recent study found that about half of unicorns in the U.S. owe their existence to immigrants. In this case, by “unicorn,” we mean highly successful, fast-growing startups—not magical creatures. The study, conducted by the National Foundation for American Policy, determined that 44 out of 87 privately held companies valued at more than $1 billion had at least one immigrant founder. It further estimated that each of these immigrant-founded companies created 760 jobs.

This is just one example of how, contrary to much of the rhetoric on the topic, immigration can contribute to economic growth and expansion of the labor market. Academic studies have found that immigration to the U.S. has little negative effect on employment levels of native workers and that the presence of immigrants is associated with greater economic productivityAnother study found that foreign-born graduate students in science and engineering departments at U.S. universities contribute to innovation and research production.

In an interview with Yale Insights, Professor Mushfiq Mobarak (one of the authors of the last study) discussed the economic logic behind the idea that immigration can be a part of the formula for economic growth. 

Q: How well is the impact of immigration on the U.S. economy understood?

The research on the economic impact of immigration is quite clear, but I think there are lots of public misperceptions about the effects on the U.S. economy. When people think about what an immigrant does, the first thing they think about is, “Here’s an immigrant that comes, takes a job, and that’s a job that an American could have otherwise received.” But the actual story is not that simple.

It’s often the case that immigrants take jobs that Americans don’t want, and it’s also often the case that Americans have a set of unique skills—language skills or customer- or client-facing skills—that immigrants cannot easily reproduce. So, what you end up seeing is immigrants sort into jobs that Americans otherwise would not be taking.

The story can get even better than that. In addition to immigrants not being substitutes for American workers, they may even be complements for those workers. One example would be an immigrant who is willing to take a low-paying job, say, at the back of a restaurant washing dishes. That makes the restaurant business more sustainable and viable, and it allows the restaurant owner to hire more American workers to be client-facing, say, as maître d’ or waiters or managers.

Source: Yale Insights, March 30, 2017. Read full article