Migration and economic development: The unintended consequences for technological innovation and, thus, the development of societies arising from barriers to high-skilled immigrants
CEDIS Working Paper VARIA n.º 6 julho 2019
Over the years, high-skilled immigration has been fundamental for the development of societies, either from an economic or social perspective, but its value has been potentially underestimated and neglected as a factor of utmost importance. In fact, numerous and fascinating discoveries have been made by immigrants as it is the case of Scottish scientist Alexander Graham Bell that created the telephone in 1876 while he was living in the United States of America. However, a relatively recent wave of populism in different countries around the world has appealed for anti-immigration policies, which generates controversy as it raises several questions regarding its advantages and disadvantages. So, this dissertation aims to understand the link between high-skilled immigration and technological development, namely in advanced economies, and its impact in the development of societies. For that matter, it was used an instrumental variable in the regression adopted, in order to rectify eventual endogeneity problems in the high-skilled immigrants variable as it might have a both way causation with technological innovations. Thus, the analysis done has demonstrated that there is, in fact, a statistically significant relationship between high-skilled immigrants and technological innovation. Placing more obstacles to the entrance of talented non-natives will have negative consequences, namely with having less patent applications by around 9%. On the other hand, it was also taken into account the impact that this increase in the talent pool would have in the development of societies by doing a multivariate regression with a quadratic transformation. Indeed, the results were that it was necessary an employment rate of highskilled immigrants higher than around 81,67% to see a decrease in income or wealth inequality. Thus, policymakers need to see the whole picture when considering engaging in more restrictive immigration policies as there are repercussions to it that can be sometimes overlooked.