Immigration, Innovation, and Wages in the U.S.: What the Research Really Says

In this article, we’ll explore how immigration affects both innovation and wages in the U.S., drawing on decades of studies. We’ll also compare how different researchers have tried to measure these effects—sometimes reaching very different conclusions. The goal is to make complex economics research accessible, so you can see what the evidence shows and why scholars sometimes disagree.

I am an immigrant from South Korea who came to the United States in pursuit of the American Dream. Immigration is one of the hottest topics in American public life. Some people worry that newcomers take jobs and lower wages. Others argue that immigrants bring energy, skills, and fresh ideas that push the economy forward. But what does the research actually say?

In this article, we’ll explore how immigration affects both innovation and wages in the U.S., drawing on decades of studies. We’ll also compare how different researchers have tried to measure these effects—sometimes reaching very different conclusions. The goal is to make complex economics research accessible, so you can see what the evidence shows and why scholars sometimes disagree.

Why Immigration Matters for Innovation and the Economy

I immigrated to the United States from South Korea. When I was in my Ph.D. program, most of the other students came from all around the world. Immigrants make up about 14% of the U.S. population but an even larger share of its workforce in science, technology, and engineering. Think of Silicon Valley, where immigrant founders played key roles in companies like Google, Tesla, and Intel. At the same time, immigrants also fill crucial jobs in healthcare, agriculture, and construction. For example, Cupertino, the home of Apple’s headquarters, has a population that is nearly 80% Asian.

This mix makes immigration uniquely important: it doesn’t just expand the labor force, it also fuels entrepreneurship and knowledge creation. Economists believe this helps drive productivity growth, the ultimate engine of rising living standards.

But immigration also raises thorny questions:

• Do immigrants push down wages for native-born workers?
• Do they “take” jobs, or do they create new ones?
• How can we even measure something as complex as “innovation”?

Let’s unpack what the research says.

Immigration and Wages: The Debate

1. The Local Labor Market Approach (Card and Borjas)

• George Borjas (Harvard) argued that immigration harms native wages, especially for less-educated workers. He compared cities with different levels of immigration and found that larger inflows were linked to wage declines.
• David Card (Berkeley) challenged this. His famous study of the Mariel Boatlift—when 125,000 Cubans arrived in Miami in 1980—found little to no effect on wages, even for low-skilled workers.

Why the difference? Borjas emphasized national-level labor supply effects, while Card highlighted how local economies adjust. Businesses can expand, consumers demand more, and native workers may move elsewhere.

2. Structural and Simulation Models

Later economists built structural models that simulate the entire labor market. These models often find that immigration has tiny overall wage effects—sometimes slightly negative for workers with less education, sometimes slightly positive for others.

In fact, the National Academy of Sciences (2017) concluded that immigration has little to no impact on average wages of U.S. natives in the long run.

3. Dynamic Adjustment and Complementarity

More recent work looks at how immigrants and natives can be complements rather than substitutes. For example, an immigrant construction worker may enable a native-born supervisor to be more productive. Similarly, foreign-born scientists may complement American engineers in research teams.

This perspective shifts the debate: immigration isn’t just about “supply and demand,” but about how teams, skills, and industries evolve together.

Immigration and Innovation: The Research Frontier

If wages are the old battleground, innovation is the new frontier. Measuring the impact of immigration on technological progress is tricky, but researchers have gotten creative.

1. Patents and Research Output

Many studies track patents as a measure of innovation. For instance:

• Immigrants are overrepresented among inventors in the U.S., producing a disproportionate share of patents.
• Economists like Hunt & Gauthier-Loiselle (2010) found that a 1% increase in immigrant college graduates raised patenting per capita by 9–18%.

This suggests immigrants don’t just join existing research—they expand it.

2. High-Skilled Immigration and STEM Talent

Policies like the H-1B visa have been a major focus. Research by Kerr & Lincoln (2010) shows that increases in H-1B admissions directly boosted the number of patents, especially in IT and engineering.

But critics argue that reliance on temporary visas can depress wages for native-born tech workers. So again, there’s a tradeoff between wage effects and innovation spillovers.

3. Firm Creation and Entrepreneurship

Immigrants are more likely to start businesses. One famous study showed that over 40% of Fortune 500 companies were founded by immigrants or their children. These firms often grow faster and employ more people than average.

So the evidence is strong: immigration boosts innovation and dynamism, not just labor supply.

Comparing Approaches: Why Studies Disagree

Why do different studies sometimes show different results? It comes down to methodology.

Local vs. National Studies

• Local studies (like Card’s Miami example) may show little wage impact because workers and firms adjust quickly.
• National studies (like Borjas’s) may capture broader effects that local studies miss.

Short-Term vs. Long-Term

• In the short run, immigration might slightly depress wages for some groups.
• In the long run, innovation and business creation expand opportunities, offsetting these effects.

Different Measures of Innovation

• Some studies focus on patents, others on publications, others on entrepreneurship.
• Innovation is hard to capture in one number, so results vary depending on what’s measured.

What the Latest Research Shows

Recent big-picture work highlights a crucial point:

• Immigration doesn’t just affect wages or jobs—it changes the rate of knowledge creation and long-term economic growth.
• By bringing in diverse skills and perspectives, immigrants help economies escape stagnation and adapt to new challenges.

In other words, the effects are not just about a “slice of the pie.” Immigration helps grow the pie itself by making the U.S. more innovative.

This view aligns with new economic models that connect immigration to productivity growth, not just labor supply.

The Human Side of the Story

It’s easy to get lost in numbers and models, but immigration is also about people:

• The immigrant nurse caring for patients in understaffed hospitals.
• The software engineer who files patents and builds apps millions use.
• The farmworker who keeps food affordable and abundant.
• The entrepreneur who creates the next big company.

Each of these roles reflects how immigration shapes both everyday life and the long-term trajectory of the U.S. economy.

Policy Implications

So what should policymakers take from all this?

1. Wage fears are often overstated. Research shows small or no negative effects overall.
2. Innovation benefits are real and significant. Cutting immigration risks slowing the U.S.’s global leadership in technology.
3. Skilled and unskilled immigration both matter. The U.S. economy relies on talent across the spectrum.
4. Policy design is key. For example, expanding high-skilled visas or smoothing paths to citizenship could maximize benefits.

Conclusion: Immigration as America’s Superpower

The evidence is clear: immigration fuels both the day-to-day labor force and the big leaps in innovation that drive growth. Wages aren’t collapsing, and in many cases, new arrivals create opportunities rather than destroy them.

Of course, immigration brings challenges—social integration, wage fairness, and policy design all matter. But looking at the research as a whole, immigration has been more of a blessing than a burden for the U.S.

In the end, America’s story has always been one of newcomers bringing new ideas. And if history is any guide, that’s not a weakness—it’s a superpower.