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Immigrants and the New Brain Gain: Ways to Leverage Rising Educational Attainment
June 2017

Immigrants and the New Brain Gain: Ways to Leverage Rising Educational Attainment

Hispanic Economic Development Corporation of Kansas City

The current sulfurous debate over immigration would lead one to believe most immigrants arrive with low levels of education and impose a large, enduring fiscal burden on the United States. These flows, it is argued by some, are the byproduct of an immigration system that fails to serve national interests and protect the nation’s citizens.

However a recent study that we co-authored makes clear that immigrants come with far greater endowments than may be commonly appreciated. Our results reveal that 48 percent of immigrants who entered the United States between 2011 and 2015 were college graduates (compared to 31 percent of U.S.-born adults). This is a striking increase over the 27 percent share for newcomers arriving 25 years earlier. The number of foreign-born college graduates (11.1 million) today is three times higher than in 1990.

This rising education profile of immigrants has happened in largely ad hoc fashion, as the basic architecture of U.S. immigration policy has not changed significantly since its last major revision in 1990. Rather, it is the product of a number of global trends: growing student and highly skilled migration from Asia, increased educational attainment worldwide, and the embrace of English for academic coursework, business, trade, and entertainment.

The “brain gain” we document in our report is particularly relevant to the current debates in the context of an aging U.S. population, as a typical recent immigrant with a bachelor’s degree contributes almost $500,000 more in taxes than he or she uses in public benefits over a life span, according to the National Academies of Sciences.

What are some of the implications of our findings for immigration and immigrant integration debates and policy, so the United States can better leverage this brain gain?

First, we find that a significant portion (44 percent) of recently arrived immigrants with university degrees entered on temporary visas as skilled workers or international students. Many of these temporary migrants work in high-growth fields such as science, technology, engineering, and mathematics (STEM) that are key to innovation, labor productivity, and the future growth of the U.S. economy. But the path to permanent legal status for many of these talented immigrants is often long, costly, and unpredictable. What is needed, the Migration Policy Institute (MPI) has argued elsewhere, is a smoother, more predictable pathway—a “transmission belt” if you will, for both employers and workers—from temporary to permanent status. One strategy would be to offer provisional visas that would allow employers to recruit foreign-born workers for permanent jobs and future immigration after a testing period of several years.

Second, as our research reveals, the flows of immigrants and their characteristics are changing faster than policymakers often recognize and take into account. One result is that the nation’s permanent and temporary employment-based visa regimes are unable to react nimbly to changing economic conditions. Another is that employers often complain about lacking access to needed foreign talent, while some domestic workers face unfair competition. MPI has argued that to ensure that shifting immigration flows meet the needs of national and state economies, an independent governmental commission should be created to help inject greater dynamism in the visa allocation process. This bipartisan commission would systematically monitor labor market and other economic trends, and make recommendations to Congress and the administration on the types and levels of employment-based visas needed. Of course, a central goal would be to protect the interests of U.S. workers, native born and immigrant alike. The current consensus among economists is that by and large highly skilled immigrants who came in the past two decades have had a positive impact on the employment and wage opportunities of U.S.-born workers, while contributing to productivity growth, entrepreneurship, and technological change. Whether these largely positive impacts continue as more highly educated immigrants arrive is unknown. Importantly, the commission would examine the ongoing impacts of newcomers on the economy and on the economic well-being of domestic workers.

Third, we find that immigrant college graduates are widely dispersed across the country. In almost every state the college-educated immigrant population grew faster than that of the native born. Moreover, in a number of states, immigrants are more educated than the U.S- born adults—a trend that was particularly pronounced in the Rust Belt. There, about 60 percent of recent immigrants had at least a bachelor’s degree, as compared to just one-quarter of natives. The centrality of immigrants to the economies of these and other states suggests that, as in Canada and Australia, the U.S. states should be playing a more meaningful role in framing not only immigrant integration, but immigrant admission policy.

Finally, as earlier MPI studies have documented, not all highly skilled immigrants integrate smoothly into the U.S. economy. We have found that close to 2 million college graduates who are immigrants are underemployed. That is, they are either unemployed or working in low-skilled jobs. The cost of this “brain waste” is high: $40 billion in forgone wages annually and $10 billion in lost federal, state, and local tax payments. Most of the underemployed are permanent immigrants; the majority received their degrees abroad. Policy antidotes include English classes, more effective recognition of foreign-earned academic and professional credentials, and help navigating the U.S. labor market.

The current administration has stated that it would like to see a more meritocratic immigration system. But as we point out in our new study, nearly one in two recent immigrants holds a university degree, a share that has risen rapidly over time. This trend reflects the magnet that the United States is to the world’s talent. However anti-immigrant, “America First” rhetoric may make the best and brightest less likely to come to the United States, while prompting those educated and trained here to leave. Worrisome early patterns can be seen in declining applications from abroad to U.S. universities, reduced travel planning to the United States, and the relocation of engineers working on artificial intelligence to Canada. If these trends deepen, they could reverse the changing—and encouraging—realities that we have documented, moving us away from, not closer to, a more meritocratic system.