Gaurav Khanna
Full List of Research
Working Papers:
We study how US immigration policy and the Internet boom affected not just the US, but also led to a tech boom in India. Students and workers in India acquired computer science skills to join the rapidly growing US IT industry. As the number of US visas was capped, many remained in India, enabling the growth of an Indian IT sector that eventually surpassed the US in IT exports. We leverage variation in immigration quotas and US demand across occupations to show that India experienced a ‘brain gain’ when the probability of migrating to the US was higher. Changes in the US H-1B cap induced changes in fields of study, and occupation choice in India. We then build and estimate a quantitative model incorporating trade, innovation, and dynamic occupation choice in both countries. We find that high-skill migration raised the average welfare of workers in each country, but had distributional consequences. The H-1B program induced Indians to switch to computer science occupations, and helped drive the shift in IT production from the US to India. We show that accounting for endogenous skill acquisition is key for quantifying the gains from migration.
Traditional Institutions in Modern Times: Dowries as Pensions When Sons Migrate (with Natalie Bau, Corinne Low, and Alessandra Voena) revise and resubmit at the Quarterly Journal of Economics
This paper examines whether an important cultural institution in India – dowry – can enable migration by increasing the liquidity available to young men to share the gains of migration with their parents. We hypothesize that one cost of migration is the disruption of traditional elderly support structures, where sons live near their parents and care for them in their old age. Dowry can attenuate this cost by providing sons and parents with a moveable transfer that eases constraints on income sharing. To test this hypothesis, we collect two new datasets on property rights over dowry across family members. Net transfers of dowry to a man’s parents are common but far from universal. Consistent with using dowry for income sharing, transfers occur more when sons migrate, especially when they work in higher-earning occupations. Nationally representative data confirms that migration rates are higher in areas with stronger historical dowry traditions. Finally, exploiting a large-scale highway construction program, we show that men from areas with stronger dowry traditions have a greater migration response to reduced migration costs. Despite its well-documented adverse consequences, dowry may persist because it facilitates old-age support, promoting migration.
We characterize how firms structure supply chains under climate risk. Using new data on the universe of firm-to-firm transactions from an Indian state, we show that firms diversify sourcing locations, and that suppliers exposed to climate risk charge lower prices. Our event-study analysis shows firms with suppliers in flood-affected districts experience a temporary decline in inputs, followed by a return to original levels. We develop a general equilibrium spatial model of firm input sourcing under climate risk. Firms diversify identical inputs from suppliers across space, trading off the probability of a climate disruption against higher input costs. We quantify the model using data on 271 Indian regions, showing real wages vary across space and are correlated with geography and productivity. Wages are inversely correlated with sourcing risk, giving rise to a cost minimization-resilience tradeoff. Supply chain diversification unambiguously reduces real wage volatility, but ambiguously affects their levels, as diversification may come with higher input costs. While diversification helps mitigate climate risk, it exacerbates the distributional effects of climate change by reducing wages in regions prone to more frequent shocks.
Supply Chain Resilience: Evidence from Indian Firms(with Nicolas Morales and Nitya Pandalai-Nayar) revise and resubmit American Economic Journal: Macroeconomics
We characterize what features make supply chains more resilient. Using new data. on the universe of firm-to-firm transactions from an Indian state, we identify firms with larger supplier risk following the Covid-19 lockdowns. Using an event-study design we find firms with suppliers in strict-lockdown districts experienced 4.5pp higher separation rates (a 15% increase relative to baseline). We study which characteristics increase supply-chain resilience. Firms that buy more complex products, with fewer available suppliers, are less likely to break links. We explore how firms change post-shock supplier composition. Firms with higher supplier risk form new links with larger and better-connected suppliers.
Spatial Mobility, Economic Opportunity, and Crime (with Carlos Medina, Anant Nyshadham, Daniel Ramos, Jorge Tamayo and Audrey Tiew) revise and resubmit at American Economic Review
Neighborhoods are strong determinants of both economic opportunity and criminal activity. Does improving connectedness between segregated and unequal parts of a city predominantly import opportunity or export crime. We use a spatial general equilibrium framework to model individual decisions of where to work and whether to engage in criminal activity, with spillovers across the criminal and legitimate sectors. We match at the individual level various sources of administrative records from Medellin, Colombia, to construct a novel, granular dataset recording the origin and destination of both workers and criminals. We leverage the rollout of a cable car system to identify key parameters of the model, informing how changes in transportation costs causally affect the location and sector choices of workers and criminals. Our counterfactual exercises indicate that, when improving the connectedness of almost any neighborhood, overall criminal activity in the city is reduced, and total welfare is improved.
The Aggregate Implications of Cultural Proximity(with Brian Cevallos Fujiy and Hiroshi Toma)
Emerging economies often feature low-quality institutions, generating micro-level trade frictions. In these settings, firms may rely on cultural-proximity-based informal institutions to overcome such frictions. We quantify the aggregate effects of cultural proximity in a production network. Using new microdata on firm-to-firm trade from India with information on prices, transactions, and caste and religious connections, we find that higher cultural proximity reduces prices and fosters trade at intensive and extensive margins. Our evidence suggests these results are driven by firms trying to overcome frictions imposed by low-quality institutions. Guided by these facts, we propose a quantitative firm-level production network model, where cultural proximity and institutional quality influence trade and matching costs. Our counterfactual exercises indicate that an economy composed of culturally closer firms features lower costs, lower prices, higher sales and higher welfare with respect to an economy with culturally distant firms.
Extending the Social Safety Net: Female Labor Supply and Rural Pension Eligibility in Brazil(with Margaret Lay, Stephanie Lee, and Benjamin Thompson) revise and resubmit at Journal of Public Economics
In 1991, Brazil expanded its rural old-age pension to cover millions of previously uncovered women, conditional on work requirements. We use a difference-indifferences approach to show that this expansion drastically increased women’s employment by nine percentage points, or 26 percent. This increase in labor force participation occurred among women who were immediately age-eligible, and among younger cohorts that would be eligible in the future. These results illuminate the capacity of workers to respond to financial incentives for labor participation in old age, and the extent to which younger workers might be forward-looking as they respond to retirement incentives.
Abundance from Abroad: Migrant Income and Long-Run Economic Development (with Emir Murathanoglu, Caroline Theoharides and Dean Yang)
How does income from international migrant labor affect the long-run development of migrant-origin areas? We leverage the 1997 Asian Financial Crisis to identify exogenous and persistent changes in international migrant income across regions of the Philippines, derived from spatial variation in exposure to exchange rate shocks. The initial shock to migrant income is magnified in the long run, leading to substantial increases in income in the domestic economy in migrant-origin areas; increases in population education; better-educated migrants; and increased migration in high-skilled jobs. 77.3% of long-run income gains are actually from domestic (rather than international migrant) income. A simple model yields insights on mechanisms and magnitudes, in particular, that 23.2% of long-run income gains are due to increased educational investments in origin areas. Improved income prospects from international labor migration not only benefit migrants themselves, but also foster long-run economic development in migrant-origin areas.
Production Networks and Firm-Level Elasticities of Substitution (with Brian Cevallos Fujiy and Devaki Ghose)
We provide one of the first estimates of elasticities of substitution across suppliers within the same product. We estimate these elasticities by using new real-time administrative tax data on product-level prices and quantities with firm-to-firm transactions, and leveraging the geographic and temporal variation from the Covid-19 lockdowns in India. Suppliers are highly complementary even at this granular level, with an estimated elasticity of 0.55, thus amplifying negative shocks by transmitting them through the supply chain. We quantify this transmission and show that under our estimated elasticities, the overall fall in output is substantial and widespread. In policy counterfactuals, we quantify the importance of firm connectivity separately from firm size, and of targeting aid to connected firms. Protecting more connected firms mitigates output declines non-linearly with the size of the productivity shock.
Shared Identity and Entrepreneurship (with Manaswini Bhalla, Ishani Chatterjee and Manisha Goel)
We show that shared identity with elected leaders helps entrepreneurs form new and productive businesses. Following close Indian elections during 2006 −16, local firm entry by entrepreneurs belonging to the same cultural groups as winning candidates increases. Despite benefitting from preferential behavior, and in contrast to earlier work, such politically connected entrants are more productive than incumbent in-group firms. Simultaneously, business formation by out-group entrepreneurs does not decline. The high TFP of in-group entrants suggests barriers that previously precluded the entry of potentially high-performing firms. Administrative entry costs seem to be a key barrier that in-group politicians help ease.
Endogenous Production Networks and Firm Dynamics (with Anuraag Aekka)
This paper studies the role of customer and supplier acquisition in shaping firm dynamics and aggregate productivity. Using transaction-level data from a large Indian state, we document lifecycle patterns of customer and supplier networks. We find that younger firms have fewer customers and suppliers, lower sales and intermediate expenditures, and higher output prices and input costs. Motivated by these patterns, we develop a model of endogenous network formation where heterogenous firms undertake costly acquisition of customers and suppliers over the lifecycle. We study the normative properties of the model and find that the decentralized equilibrium is inefficient due to vertical and search externalities. Inefficient pricing and acquisition choices lead to quantitatively large aggregate productivity losses. We use the model to study how differences in acquisition technology map to productivity differences. We find that improvements in acquisition technology can generate sizable productivity gains, and that improvements in allocative efficiency are central for delivering these gains.
Hometown Conflict and Refugees' Integration Efforts (with Cevat Giray Aksoy, Victoria Marino and Semih Tumen)
How does violence in origin areas affect the educational outcomes of refugees in their destinations? Using administrative panel data, we find that heightened violence in the hometowns of Syrian students leads to improvements in their school outcomes in Turkiye. Turkish language and Math scores of refugee students improve, with larger impacts on Turkish scores. There is no impact on naturalized Syrian students. We observe positive spillovers on Turkish students. These findings suggest ongoing violence in refugee-origin areas reduces the prospect of returning home, and induces students to better integrate into host countries by investing in education.
Most estimates of the economic impacts of transit networks compare regions along network routes to neighboring regions away from such routes. However, in the presence of spatial spillovers in economic activity such a method will underestimate the true effect of roads and railways. In this paper, I take into account spatial spillovers in estimating the overall impacts of transit networks in India. I use an empirical strategy relying on the historical placement of major cities: by connecting nodal cities with straight lines, I instrument for the endogenous placement of these networks. Using night-time luminosity data as a measure of economic activity, I estimate the parameters of a predictive model that incorporates these spillovers, which then performs well in an out-of-sample exercise. I find that being close to transit networks between cities led to greater economic activity in the 1990s and that such activity spread to neighboring regions, substantially increasing the overall impacts. Ignoring the spillovers produces income elasticities that are only 27% of the true overall effects of such routes. These geographic externalities led to a rapid rate of convergence in incomes across regions, highlighting how transit networks and spatial spillovers together, strongly determined the geographic spread and temporal changes in the economic development of the region.
Journal Publications:
The Productivity Consequences of Pollution-Induced Migration in China (with Wenquan Liang, A Mushfiq Mobarak and Ran Song) forthcoming American Economic Journal: Applied Economics
We quantify how pollution affects aggregate productivity and welfare in spatial equilibrium. We document a robust pattern in which skilled workers in China emigrate away from polluted cities, more than the unskilled. These patterns are evident under various empirical specifications, such as when instrumenting for pollution using distant upwind power-plants, or thermal inversions that trap pollutants. Pollution changes the spatial distribution of skilled and unskilled workers, which increases returns-to-skill in cities that the educated emigrate from. We quantify the loss in aggregate productivity due to this re-sorting by estimating a spatial equilibrium model. Counterfactual simulations show that reducing pollution increases productivity through spatial re-sorting by approximately as much as the direct health benefits of clean air. We identify a new channel through which pollution lowers aggregate productivity significantly. Hukou mobility restrictions exacerbate welfare losses. Skilled workers’ aversion to pollution explains a substantial portion of the wage-gap between cities.
Migration Policy and the Supply of Foreign Physicians: Evidence from the Conrad 30 Waiver Program(with Breno Braga and Sarah Turner) forthcoming at the Journal of Economic Behavior & Organization
In the United States, rural and low-income communities have difficulty attracting and retaining physicians, potentially adversely impacting health outcomes. With a limited supply of physicians completing medical school at US universities, foreign-born and educated physicians provide a potential source of supply in underserved areas. For international medical school graduates (IMGs) the terms of the commonly used J-1 visa require a return to the home country for two years following employment in medical residency. Our analysis examines the extent to which the Conrad 30 Visa Waiver impacts the supply of physicians at state and local levels, particularly in areas designated as medically underserved. Changes in the federal limit on the number of waivers per state, combined with variation in the state-level restrictions on eligible specialties, and geographies in which physicians can work, provide evidence on the role of visa restrictions in limiting the supply of doctors. Expansion of the cap on visa waivers increased the supply of IMGs, particularly in states that did not limit waiver recipients to primary care physicians or particular places of employment. There is little evidence of reductions in US-trained doctors in states where IMG increases were the largest, suggesting little evidence for crowding out.
Trade Liberalization and Chinese Students in US Higher Education (with Kevin Shih, Ariel Weinberger, Mingzhi Xu and Miaojie Yu) Review of Economics and Statistics, 23 October 2023, doi: https://doi.org/10.1162/rest_a_01378
We highlight a lesser-known consequence of China’s integration into the world economy: the rise of services trade. We demonstrate how the US’s trade deficit in goods cycles back as a surplus in US exports of education services. Focusing on China’s accession to the World Trade Organization, we show that Chinese cities more exposed to trade liberalization sent more students to US universities. Growth in housing income/wealth allowed Chinese families to afford US tuition, and more students financed their studies using personal funds. Our estimates suggest that recent trade wars could cost US universities around $1.1 bn in annual tuition revenue.
We know little about the electoral effects of policies with broad appeal that are implemented by popular leaders, but which have adverse economics effects. We analyze voter behavior following one such policy implemented in the world’s largest democracy — India’s 2016 ‘Demonetization,’ which unexpectedly made 86% of the currency-in-circulation redundant overnight, and led to severe cash shortages and economic hardship in subsequent months. Yet, the policy appealed to a majority of voters, and was framed as one that would combat corruption. We leverage a discontinuity in the number of bank branches arising from a nationwide, district-level bank expansion policy. Using the fact that districts with fewer banks had greater cash shortages, we identify the impacts of demonetization’s economic severity at the bank-expansion cutoff. Regression discontinuity estimates show that following demonetization, voters in places with more severe demonetization had less favorable views of the policy. Using a difference-in discontinuity design, we find that the ruling party performed relatively worse in regions with more severe demonetization, receiving a 4.7 percentage point lower fraction of votes, and were relatively less likely to win seats in state legislatures. Areas that were historically strongly aligned with the ruling party were nearly unresponsive in voting behavior, despite having a less favorable view of the policy itself.
Canonical models of entry into crime emphasize occupational sorting on economic incentives. We attempt to isolate the occupation-choice dimension of criminal participation responses to disincentives for formal employment. We link administrative socioeconomic microdata with the universe of arrests in Medell´ın over a decade, and exploit exogenous variation in formal-sector employment around a socioeconomic-score cutoff, below which individuals receive benefits if not formally employed. We model the various mechanisms by which the policy variation we study could affect both idiosyncratic and occupational criminality. Regression discontinuity estimates confirm this policy unintentionally reduced formal-sector employment and generated a corresponding increase in arrests associated with criminal enterprise activity. Consistent with an occupational choice interpretation as modeled, we find no effects on crimes unlikely to be associated with organized entities, such as crimes of impulse or opportunity. Effects on arrests are strongest in neighborhoods with more opportunities to join criminal enterprises.
Large-scale Education Reform in General Equilibrium: Regression Discontinuity Evidence from India
Journal of Political Economy, vol 131(2), February 2023 [presentation slides]
The economic consequences of large-scale government investments in education depend on general equilibrium effects in both the labor market and education sector. I develop a general equilibrium model that captures the consequences of massive countrywide schooling initiatives. I provide unbiased estimates of the model’s elasticities using a Regression Discontinuity design derived from Indian government policy. The earnings returns to a year of education are 13.4%, and the general equilibrium labor market effects are substantial: they depress the returns by 6.6 percentage points. These general equilibrium effects have distributional consequences across cohorts and skill groups: as a result of the policy, unskilled workers are better off and skilled workers worse off.
Women's Well-being During a Pandemic and its Containment (with Natalie Bau, Corinne Low, Manisha Shah, Sreyashi Sharmin and Alessandra Voena) Journal of Development Economics, vol 156, March 2022, 102839
The COVID-19 pandemic brought the dual crises of disease and the containment policies designed to mitigate it. Yet, there is little evidence on the impacts of these policies on women in lower-income countries, where there may be limited social safety nets to absorb these shocks. We conduct a large phone survey and leverage India's geographically varied containment policies to estimate the association between the pandemic and containment policies and measures of women's well being, including mental health and food security. On aggregate, the pandemic resulted in dramatic income losses, increases in food insecurity, and declines in female mental health. While potentially crucial to stem the spread of COVID-19, the greater prevalence of containment policies is associated with increased food insecurity, particularly for women, and reduced female mental health. For surveyed women, moving from zero to average containment levels is associated with a 38% increase in the likelihood of reporting more depression, a 73% increase in reporting more exhaustion, and a 44% increase in reporting more anxiety. Women whose social position may make them more vulnerable those with daughters and those living in female-headed households experience even larger declines in mental health.
Job Loss, Credit and Crime in Colombia (with Carlos Medina, Anant Nyshadham, Christian Posso and Jorge Tamayo) American Economic Review: Insights vol 3(1), p 97-114, March 2021
We investigate the effects of job displacement, as a result of mass-layoffs, on criminal arrests using a novel matched employer-employee-crime dataset from Medellín, Colombia. Job displacement leads to immediate and persistent earnings losses, and higher probability of arrest for both the displaced worker and family members. Effects are pronounced for young men for whom opportunities in criminal enterprises are prevalent. Leveraging a banking policy-reform, we find that greater access to credit attenuates the criminal response to job loss. Additional results on heterogeneity and types of crime are also consistent with economic incentives contributing to criminal participation decisions.
Resources, Conflict and Economic Development in Africa (with Ach Adhvaryu, James Fenske and Anant Nyshadham) Journal of Development Economics, vol 149, March 2021, 102598
Evidence suggests that natural resources have driven conflict and underdevelopment in modern Africa. We show that this relationship exists primarily when neighboring regions are resourcerich. When neighbors are resource-poor, own resources instead drive economic growth. To motivate the empirical study of this set of facts, we present a simple model of parties engaged in potential conflict over resources, revealing that economic prosperity is a function of equilibrium conflict prevalence, determined not just by a region’s own resources but also by the resources of its neighbors. Structural estimates confirm the model’s predictions, and reveal that conflict equilibria are more prevalent where institutional quality is worse.
The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System (with John Bound, Breno Braga and Sarah Turner) Journal of Economic Perspectives, vol 35(1), Winter 2021
University learning has facilitated the flow of individuals and knowledge across national borders for centuries, but the recent scale of student flows and the magnitude of tuition revenues from foreign students across the globe is unprecedented. The number of students pursuing higher education degrees outside their home countries more than doubled between 2000 and 2017 to reach 5.3 million (UNESCO 2018).
The Effects of Elite Public Colleges on Primary and Secondary Schooling Markets in India (with Maulik Jagnani) Journal of Development Economics, vol 146 (2020)
We present the first estimates of the effects of higher education investments on lower levels of schooling. Using the roll-out of elite public colleges in India, we show that investments in higher education increased educational attainment among school-age children. Private schools entered districts with new elite public colleges, and students switched from public to private schools. In addition, elite public colleges crowded in investments in electricity, roads, and water services. We find suggestive evidence that public investments in infrastructure may have reduced setup costs for private schools, and consequently, travel costs for school-going children.
Does Affirmative Action Incentivize Schooling? Evidence from India Review of Economics and Statistics, Vol 102(2), May 2020 (Old title: "Incentivizing Standards and Standardizing Incentives: Affirmative Action in India”)
Affirmative action raises the likelihood of getting into college or obtaining a government job for minority social groups in India. I find that minority group students are incentivized to stay in school longer in response to changes in future prospects. To identify causal relationships, I leverage variation in group eligibility, school age cohorts, and state-level intensity of implementation in difference-in-differences and regression discontinuity designs. These estimators consistently show that affirmative action incentivizes about 0.8 additional years of education for the average minority group student and 1.2 more years of education for a student from a marginal minority subgroup.
A Passage to America: University Funding and International Students (with John Bound, Breno Braga and Sarah Turner) American Economic Journal: Economic Policy, Vol 12 Issue 1, February 2020
The number of international undergraduate students at US public research universities increased dramatically over the past two decades, alongside concurrent reductions in state support for universities. We show that these trends are closely connected as public research universities relied on foreign students to cushion the effects of falling appropriations. The growing capacity in emerging economies to pay for a US education provided opportunities for universities to recover revenues from full-fare-paying foreign students. We estimate that between 1996 and 2012, a 10 percent reduction in state appropriations led to an increase in foreign enrollment of 16 percent at public research universities. (JEL H75, I22, I23)
Guns and Butter? Fighting Violence with the Promise of Development (with Laura Zimmermann)
Journal of Development Economics, vol 124, January 2017, p 120-141
There is growing awareness that development-oriented government policies may be an important counterinsurgency strategy, but existing papers are usually unable to disentangle various mechanisms. Using a regression-discontinuity design, we analyze the impact of one of the world's largest anti-poverty programs, India's NREGS, on the intensity of Maoist conflict. We find short-run increases of insurgency-related violence, police-initiated attacks, and insurgent attacks on civilians. We discuss how these results relate to established theories in the literature. One mechanism consistent with the empirical patterns is that NREGS induces civilians to share more information with the state, improving police effectiveness.
Recruitment of Foreigners in the Market for Computer Scientists in the US (with John Bound, Breno Braga and Joe Golden) - Journal of Labor Economics, vol 33, part 2, July 2015, p S187-S233
We present and calibrate a dynamic model that characterizes the labor market for computer scientists. In our model, firms can recruit computer scientists from recently graduated college students, from STEM workers working in other occupations, or from a pool of foreign talent. Counterfactual simulations suggest that wages for computer scientists would have been 2.8%–3.8% higher and the number of Americans employed as computer scientists 7.0%– 13.6% higher in 2004 if firms could not hire more foreigners than they could in 1994. In contrast, total computer science employment would have been 3.8%–9.0% lower and consequently output smaller.
Book Chapters and Other Publications:
Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-income Countries(with David Newhouse and Pierella Paci) chapter in "Working through the Crisis: Jobs and Policies in Developing Countries during the Great Recession," December 2013. IZA Working Paper Version
This paper reviews evidence from 44 middle income countries on how the recent financial crisis affected jobs and workers’ income. In addition to providing a rare assessment of the magnitude of the impact across several middle-income countries, the paper describes how labor markets adjusted and how the adjustments varied for different types of countries. The main finding is that the crisis affected the quality of employment more than the number of jobs. Overall, the slow-down in earning growth was considerably higher than that in employment, and the decline in GDP was associated with a sharp decline in output per worker, particularly in the industrial sector. In several counties, hours per worker declined and hourly wages changed little. But both the magnitude and nature of the adjustments varied considerably across countries. For a given drop in GDP, earnings declined more in countries with larger manufacturing sectors, smaller export sectors, and more stringent labor market regulations. In addition, overall employment became more sensitive to GDP growth. These findings have implications that go beyond the recent financial crisis as they highlight (i) the limitations of focusing policies responses on maintaining jobs and providing alternative employment or replacement income for the unemployed and (ii) the critical role of fast-track data systems, capable of monitoring ongoing labor market adjustment during economic downturns, in supporting the design of effective policy responses.
Fighting Maoist violence with promises: Evidence from India’s Employment Guarantee Scheme (with Laura Zimmerman - The Economics of Peace and Security Journal, vol 9, no. 1, 2014)
The Indian state faces a substantial internal security threat in the form of a Maoist insurgency, but decades of relying predominantly on military strength have not been a successful strategy for resolving the conflict. Recently, there has been a growing interest in whether anti-poverty programs can increase the effectiveness of the government forces by improving the relationship between citizens and the state and making civilians more willing to share information on insurgents. A prime candidate for such a program is the National Rural Employment Guarantee Scheme (NREGS), the world’s largest public-works program. We find that the introduction of NREGS leads to an increase in violence in the short run that is driven by police-initiated attacks, and an increase in the number of captured Maoists. These results are consistent with the hypothesis that civilians assist the police because of NREGS, and suggest that the role of civilians in internal conflicts should not be ignored.
Finishing Degrees And Finding Jobs(with John Bound, Murat Demirci, and Sarah Turner - chapter in Innovation Policy and the Economy, Volume 15, William R. Kerr, Josh Lerner and Scott Stern, editors)
The rising importance of information technology (IT) occupations in the US economy has been accompanied by an expansion in the representation of high-skill, foreign-born IT workers. To illustrate, the share of the foreign born in IT occupations increased from about 15.5% to about 31.5% between 1993 and 2010, with this increased representation particularly marked among those younger than 45. This analysis focuses on understanding the role that US higher education and immigration policy plays in this transformation. A degree from a US college/university is an important pathway to participation in the US IT labor market, and the foreign born who obtain US degree credentials are particularly likely to remain in the United States. Many workers from abroad, including countries like India and China where wages in IT fields lag those in the United States, receive a substantial return to finding employment in the United States, even as temporary work visa policies may limit their entry. Limits on temporary work visas, which are particularly binding for those educated abroad, likely increase the attractiveness of degree attainment from US colleges and universities as a pathway to explore opportunities in the US labor market in IT.
Understanding the Economic Impact of the H-1B Program on the US (with John Bound & Nicolas Morales) - chapter in “High-Skilled Migration to the United States and Its Economic Consequences” eds. Gordon Hanson, William Kerr and Sarah Turner
High-Skill Immigration, Innovation, and Creative Destruction (with Munseob Lee) chapter in book," The Role of Immigrants and Foreign Students in Science, Innovation, and Entrepreneurship", (Ina Ganguli, Shulamit Kahn, Megan MacGarvie)
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.
Public Universities: The Supply Side of Building a Skilled Workforce (with John Bound, Breno Braga and Sarah Turner) RSF: The Russell Sage Foundation Journal of the Social Sciences
Over the past few decades, public universities have faced significant declines in state funding per student. We investigate whether these declines affected the educational and research outcomes of these schools. Declining funding induced public universities to shift toward tuition as their primary source of revenue. Selective research universities enrolled more out-of-state and international students who pay full fare and increased in-state tuitions, moderating impacts on expenditures. Public universities outside the research sector had fewer options to replace stagnating state appropriations, requiring diminished expenditures and increased in-state tuitions. We find suggestive evidence that cuts have negatively affected research, and more definitive evidence that they adversely affected degree attainment at both the undergraduate and graduate levels.
Better Migrant Rights Help Native Workers, Journal of International Law and Foreign Affairs (UCLA Law)
The political debate on immigration has revolved around a few issues - how immigrants affect the wages and employment of domestic workers; how immigration affects crime, entrepreneurship and innovation; and how immigrants affect the fiscal burden on host nations. Arguments on these issues shape laws and policies in countries that both send and receive migrants, which in turn help shape the size and composition of the migrant workforce around the world. However, the analysis of costs and benefits of migration is complicated by economic and social dynamics that underlie these policies. An understudied, yet related, issue is how migrant worker rights affect domestic labor of immigrant-receiving countries. While directly unexplored, the literature points to many indirect effects of migrant rights on native workers. In this Article, we use evidence from historical and contemporary economics literature to discuss the effect of migrant worker rights on native-born residents.
How Higher Education Became an Important US Export, Issues in Science and Technology, Fall 2021. National Academy of Sciences
Ideas do not carry passports. But lines on maps, as well as policies and pressures that influence who does or does not cross them, can be powerful determinants of whether and how ideas and skills align to advance scientific discovery and technological and economic progress. As headline-grabbing rhetoric and acts stir passions over immigration around the globe, Science invited social scientists to bring evidence to the discussion concerning the role foreign-born talent plays in scientific and technological discovery.