Productivity of highly skilled immigrants: economists in the postwar period

LARRY D. SINGELL, JR [*] Prior work finds declining immigrant quality in the postwar period that is linked to source-country and skill-composition changes associated with the 1965 Immigration Act. This paper uses a unique panel of foreign- and native-born American Economic Association members to show that the highly skilled experienced a similar shift away from European migrants toward those from Asia. However, the findings do not indicate that this change in source-country composition has been accompanied by a decline in quality; rather, the most recent cohorts of foreign-born economists appear to be more productive than their native counterparts. (JEL J61) I. INTRODUCTION This article is the first systematic analysis of the attributes and abilities of foreign-born U.S. economists since a descriptive study of the brain drain by Grubel and Scott [1967]. It also provides some of the first formal evidence for the largely theoretical proposition in earlier work by Bhagwati and Rodriquez [1975] that the United States draws the best skilled workers from abroad. However, recent immigration literature has not focused on the brain drain but has generated considerable debate concerning whether the 1965 Immigration and Nationality Act has reduced the skill quality of U.S. immigrants. In particular, descriptive evidence in Borjas [1987] and Greenwood [1983], respectively, indicates that the 1965 law shifted the composition of U.S. immigrants toward non-European nations and increased the number of low-skilled migrants to the United States. Our article extends this work by examining whether there has been a post-1965 change in the source-country mix of Ph.D. economists and whether such chan ges impact the productivity of the foreign born in comparison to their native counterparts. Most empirical studies of immigrant productivity have focused on earnings. Early cross-sectional studies of immigrant earnings, including Chiswick [1978a], concluded that the age-earnings profile of immigrants is steeper than that of comparable native-born workers and, though initially lower, crosses the native profile 10 to 15 years after immigration. These results are consistent with the widely held belief that the immigration process self-selects the highly motivated and industrious from their respective source countries. Thus immigrants, although they initially enter the United States with relatively low levels of human capital, eventually become more productive than their native counterparts. More recent work by Borjas [1985, 1987] has contested these conclusions, arguing that it is not possible to separately identify assimilation and cohort effects using a single cross-sectional data set. In particular, the positive correlation between earnings and years since migration in cross-sectional data may be due to immigrant assimilation or a cohort effect that arises from the declining skill quality of more recent immigrant groups. Borjas combines multiple cross-sectional data sets to separately identify assimilation and cohort effects and finds evidence indicating that earlier cohorts of immigrants do relatively better than both natives and more recent immigrant cohorts, suggesting a decline in immigrant quality. Although Chiswick [1986] challenges the contention of declining immigrant quality and Funkhouser and Trejo [1995] find evidence that immigrant quality may have increased during the 1980s, Borjas [1995] contends that the empirical evidence consistently shows that immigrant quality has declined for most of the postwar period. However, the decline in immigrant quality has not necessarily been found within specific groups of immigrants. In particular, Greenwood and McDowell [1986] find that the change in skill quality is related to the shift in the source-country composition of immigrants away from European nations toward those from Asia and Latin American after the 1965 Immigration Act. Thus, explanations for the relatively poor performance of recent immigrants, including those in LaLonde and Topel [1991, 1992) and Borjas [1992], focus on the post-1965 changes in the incentives to migrate to the United States that have increased the number of low-skilled, non- European immigrants. …