Immigration, Innovation, and Growth
Abstract
We propose a novel identification strategy to isolate exogenous immigration shocks across US counties, by interacting quasi-random variations in the composition of ancestry across counties with the contemporaneous inflow of migrants from different countries. We show a positive causal impact of immigration on local innovation and wages at the five-year horizon. The positive dynamic impact of immigration on innovation and wages dominates the short-run negative impact of increased labor supply. A structural estimation of a model of endogenous growth and migrations suggests the increased immigration to the United States since 1965 may have increased innovation and wages by 5 percent. (JEL J15, J22, J31, J61, O31, R11, R23)
Fields of Study & Subjects
Migration
Ethnicity
and Economy
Economic Growth and Development
Migration and Labor Dynamics
Publication details
- Journal / source
- American Economic Review
- Publisher
- American Economic Association
- Volume
- 116
- Issue
- 3
- Pages
- 828–861
- Publication date
- 27 February 2026
- Language
- EN