When immigrants go home, America loses
A key measure of the nation’s economic health is its ability to attract capital, not only the financial kind, but capital of the human sort.
The immigration debate in recent years has often discounted the contribution of new arrivals, while sometimes implying that the United States would be better off if most immigrants would simply go home.
Well, we should be careful what we wish for. Many immigrants, namely those offering the skills our economy needs most for innovation and economic growth, are doing just that – going home.
The outflow began well before the current recession and financial mayhem, according to a new study made public last week by the Kauffman Foundation. Its conclusions are a reminder that America can no longer take for granted its ability to attract the world’s top talent.
The research, led by Vivek Wadhwa of Harvard, found that skilled immigrants were leaving the United States and returning to their home countries in greater numbers.
They’re drawn by better career opportunities, a better quality of life and the need to be closer to family and friends.
The study, titled “America’s Loss is the World’s Gain,” surveyed 1,203 Indian and Chinese immigrants, all of whom had worked or studied in the United States and subsequently returned home.
The outflow of this talent is a threat to American competitiveness. As Wadhwa noted in a recent BusinessWeek article, immigrants started 52 percent of Silicon Valley technology companies and contributed work for more than a quarter of America’s global patents.
In 2006, U.S. companies founded by immigrants employed 450,000 people and reported $52 billion in revenue.
No government agency keeps track of immigrants returning to their homelands. But human resource directors in India and China told Wadhwa’s research team that over the last few years, the job applications they received had risen by a factor of 10.
What’s worrisome is that up to a third of the returnees had permanent resident status in the United States or were American citizens.
Nearly half were planning to start businesses in their home countries. They saw their chances of success as better at home than in the United States.
About one-third of the Indians and one-fifth of the Chinese surveyed said visa issues were a strong factor in their decision to return.
Most, however, cited other reasons, such as a growing demand at home for their skills, better opportunities for professional growth or problems adjusting to life in the United States.
Most were fairly young. The average age of the Indians was 30. The average age of the Chinese was 33. Most were male, married and childless.
They were highly educated, with degrees in management, technology or science. Most held master’s degrees or Ph.D.s.
According to the study, “these returnees are at the very top of the educational distribution for these highly educated immigrant groups – precisely the kind of people that … make the greatest contribution to the U.S. economy and business and job growth.”
Sadly, given the political climate and the economic crisis, we’re likely to lose even more of this human endowment.
The stimulus bill, for example, imposed tough new restrictions on H-1B visas for highly skilled workers hired by companies getting bailout money – another sign that the country is turning inward, despite the cost to America’s long-term competitiveness.