From Brain Drain to Brain Gain: The Truth About High-Skilled Immigration 

- Hi, I am Gaurav Khanna. I'm an associate professor of economics at the University of California San Diego. I study the impacts of high skill immigration, both on destination countries like the US and origin countries like India and high scale immigrants, mean workers like tech workers, physicians, international students, and faculty. So the story of our paper essentially begins somewhere near, near where we are right now in Silicon Valley, where with the advent of the tech boom, you know, with the commercialization of the internet, there was a, a tech boom that led to a big growth in computer science employment in the us. But this computer science employment essentially was driven by immigrants. So, you know, in 1994, only 6% of computer scientists were born abroad. But by 2007, the Eve of the great recession, one out of every four computer scientists in the US was born abroad, but they were not just born anywhere. They were particularly born in India. When you think about the impacts of kind of more computer programmers from India, the story can, can is really quite nuanced, right? On the one hand, more programmers and software developers might compete with, with us born computer scientists and US born programmers, right? But if you think about it, you know, the story is more complicated than that because if I hire more programmers from India, I need to hire more managers in these companies, I need to hire more HR workers, then you kind of have this big increase in tech production and tech employment as a result of hiring more immigrant workers from India in these computer science fields. But the other interesting thing that you want to think about is that these immigrants are innovators. So they come up with new technology, new software, and this has a big transformative impact on the US economy because it affects not just the tech sector, but it also affects consumers like you and me. You know? So our lives have changed really because of the, the advancements in software that have been made, right? Our phones are faster, our computers are faster. We're using better technology in our lives every day. And then the entire US economy kind of has what we call a productivity boost. So why does that happen? That's because we have downstream sectors like the car manufacturing sector or the banking sector. They use a lot of software in their production processes. They use a lot of software in cars. So all the innovation that Indian programmers are doing in Silicon Valley kind of has these downstream impacts on downstream sectors of the us, like the car manufacturing sector and the banking sector. And so it creates a, what we call kind of value added growth in the economy. But what's really interesting is to also think about the impacts of these, this migration on the Indian economy, right? Indian workers, Indian tech firms, and so on. What's happening in India is that a lot of students and workers were now acquiring computer science skills and engineering skills with the prospect of migrating to the us. Well, why is that? Well, the wages in Silicon Valley are about 600% higher than computer science wages in India, right? So suddenly, if you get a job in Silicon Valley, it's almost like winning a huge lottery ticket, right? So you see in India that a lot of Indian students and workers acquired these valuable skills in computer science and engineering fields with the prospect of migrating to the us. But US immigration policy is such that they cap the number of immigrants that are coming from India, right? That means a lot of students got these skills to go to the us but not everyone could come to the us. So suddenly you have this skilled workforce in India, right? What you also have is a lot of return migration. So US immigration policy again, is such that these visas expire after six years, and you find that a lot of computer scientists go back to India. So in the long run, what firms in India do is they tap into the skilled workforce and the tech boom takes off in India, right? So essentially it's a story about the spread of the tech boom from the US halfway to halfway across the world in India, partly because of US immigration policy. And so suddenly you have a lot of skilled workers in India, right? That's brain gain. And then when you have what we call brain circulation, which is these return migrants. So you have a lot of workers who go to Silicon Valley, they work for six years, and then they come back to India and they come back bringing lots of skills. They come back bringing technologies, they come back bringing connections and networks that then really help develop the Indian tech sector. So what you start seeing is that production slowly starts getting offshore from the US to India. And over time, India becomes the largest exporter of IT products in the world, right? For many decades, the US was the largest exporter of IT products, but around 2005, India kind of overtakes the US and this partly happens because of the brain gain in the brain circulation that happened as a result of these dynamics, right? And so essentially what we saw in India was a, what we call a structural transformation. There was this growth in kind of high skill tech services in a developing country, really, right? Partly because of the fact that a lot of work was being offshore to India. Now, this includes big companies sending kind of low level coding to India, but it also includes companies opening up their own firms in India. So you have Google, Silicon Valley, and now you have like Google Visa, which is a city in India, right? So, you know, I think a lot of people have the intuition that immigration is kind of like a zero sum game, right? Where you have like one more computer science worker that means one less job for an American worker, right? And you know, it's a reasonable intuition to have, right? It's a reasonable hypothesis to have. But I think when you think of high school immigration, I think the story is a lot more nuanced for many reasons, right? Partly because high school immigrants are innovators. So there's zero sum kind of calculus that you might have thought of when it comes to workers. Kind of breaks down when you have innovation, when you have consumers benefiting, when you have downstream companies benefiting, and when you have, when it helps other workers in those companies, right? So Amazon hires more programmers. Well, Amazon has to hire more managers, it has to hire more warehouse workers. So it increases the wages and employment of other workers in these sectors, right? So immigration is really not zero sum in that way. It can really kind of lift all boats in many different ways.