The Impact of High Skilled Immigration on Regional Entrepreneurship

Abstract

The arrival of high skilled immigrants through new H-1B visas increases regional entrepreneurship. A doubling of immigrants is associated with an increase of 6% in the three-year quality-adjusted entrepreneurship at the city (CBSA) level, and 5.8% at the neighborhood (ZIP Code) level. In contrast, continuing H-1Bs and the arrival of unskilled immigrants (H-2Bs) do not increase regional entrepreneurship. The effect of immigrants is concentrated in increasing the quality, rather than the quantity, of startups. Heterogeneity analyses suggest the effect is sensitive to the concentration of ethnic enclaves, but not to the overall income or education of the receiving region.

Keywords: immigration, H-1B, entrepreneurship, regions

JEL Classification: L26, J61, R10