Marta Prato, Cowles Post-Doctoral Fellow, Yale University
How does inventors’ migration affect international talent allocation, knowledge diffusion, and productivity growth? To answer this question, I construct a micro-level dataset of migrant inventors on the US-EU corridor from patent data and document that (i) gross migration is asymmetric, with brain drain (net emigration) from the EU to the US; (ii) migrants increase their patenting by 42% per year after migration; (iii) migrants continue working with inventors at origin after moving, although less frequently; (iv) migrants’ productivity gains spill over to their collaborators at origin, who increase patenting by 15% per year when a co-inventor emigrates. These results motivate a novel two-country innovation-led endogenous growth model. Heterogenous inventors produce innovations, learn from others and make dynamic migration and return decisions. Migrants interact with individuals at origin and destination, creating a network that diffuses knowledge within and across countries. I calibrate the model to match the empirical results and study the impact of innovation and migration policy. A tax cut for foreigners and return migrants in the EU to eliminate the brain drain increases EU innovation but lowers US innovation and knowledge spillovers. The former effect dominates in the first 25 years, increasing EU productivity growth by 5%, but the latter dominates in the long-run, lowering growth by 6% . On the migration policy side, doubling the size of the US H1B visa program increases US and EU growth by 9% in the long-run, because it sorts inventors to where they produce more innovations knowledge spillovers