The first article is from the 16 March 2009 edition of Business Week, page 68, by Vivek Wadhwa America's Immigrant Brain Drain. His discussion focuses mainly on Chinese and Indian skilled immigrants, and their reasons for returning to their native countries are simple - better quality of life (even at a lower average pay), better career prospects (China is figuring out how much it will grow this year, not whether it will grow or fall, and growth creates careers), and the comfort of family and friends.
Immigrants have started 52% of Silicon Valley's tech companies, and get many of the Masters and PhDs awarded in science and engineering. And demand for their skills is growing in their home countries.
So why can this be bad for America's economy? The ominous portend of this trend is discussed in the second article that appears in the March 7th edition of the Economist, in an article on page 84 Give my your scientists ... - restricting the immigration of highly skilled workers will hurt America's ability to innovate.
A few paragraphs that make use of patent data in an interesting way:
Addressing these issues requires data on just how inventive immigrants are, a question that until recently was the province of educated guesswork. But William Kerr, an economist at Harvard Business School, used name-matching software to identify the ethnicity of each of the 8 million scientists who had acquired an American patent since 1975. He found that the share of patents awarded to scientists born in America fell between 1975 and 2004. The share of all patents given to scientists of Chinese and Indian descent living in America more than tripled, from 4.1% in the second half of the 1970s to 13.9% in the years between 2000 and 2004. Nearly 40% of patents filed in 2005 by Intel, a silicon chip maker, were for work done by people of Chinese or Indian origin. Some of these patents may have been awarded to American-born children of earlier immigrants, but Mr. Kerr reckons that most changes over time arise from fresh immigration. What of the criticism that these workers are displacing native scientists who would have been just as inventive? To address this, Mr. Kerr and William Lincoln, an economist at the University of Michigan, used data on how patents responded to periodic changes in the number of H1B entrants. If immigrants were merely displacing natives, increases in the H1B quota should not have let to increases in innovation. But Kerr and Lincoln found that when the federal government increased the number of people allowed in under the program by 10%, total patenting increased by around 2% in the short run. This was driven mainly by more patenting by immigrant scientists. But even patenting by native scientists increased slightly, rather than decreasing as proponents of crowding out would have predicted
