\documentclass{beamer}
\usepackage{graphicx}
\usepackage{setspace}
\usepackage{comment}
\usepackage{amsmath}
\usepackage{natbib}
\usepackage[dvips]{rotating}
\usepackage{url}
\usepackage{hyperref}
\usepackage{booktabs}
\usepackage{tabulary}
\usepackage{subfigure}
\usepackage{ragged2e}
\usepackage[justification=centering]{caption}[2007/12/23] 
\usetheme{Boadilla}

\newcounter{saveenumi}
\newcommand{\seti}{\setcounter{saveenumi}{\value{enumi}}}
\newcommand{\conti}{\setcounter{enumi}{\value{saveenumi}}}

\resetcounteronoverlays{saveenumi}

\begin{comment}
Please include the following acknowledgements in any reproductions of this material.
Source document: Kevin A. Bryan and Heidi L. Williams, 2021. 
Figure #: © .  All rights reserved. [Citation with link to source]
Table #: © .  All rights reserved. [Citation with link to source]
\end{comment}

\title[]{Innovation: Market Failures and Public Policies} 
\subtitle{Lecture 6: Labor market policies \vspace{3cm}}
\institute[]{\justifying The material covered in these slides is drawn from: Bryan, Kevin and Heidi Williams (2021) "Innovation: Market Failures and Public Policies," Chapter 13 in the \emph{Handbook of Industrial Organization Volume 4}, edited by Kate Ho, Ali Hortacsu, and Alessandro Lizzeri.}
\date{} 

\graphicspath{{graphics/}}

\begin{document}
	
\frame{\titlepage}

\begin{frame}{Labor market policies}
    
Policies directly targeting labor supply can affect whether and how an individual will innovate

\vspace{3mm}

Focus on one set of labor market policies: immigration policies
\begin{itemize}
    \item A variety of evidence suggests that the productivity of an individual and the spillovers of their innovative activity depend on their local environment
    \item Immigration policy can affect \emph{who} is innovating, and \emph{where}
    \item Immigration is one of the few aspects of labor market policy that has been studied in relation to innovation
\end{itemize}
Lecture concludes by summarizing existing evidence on relationship between innovation and other labor market policies    
\end{frame}

\begin{frame}{Background: Immigration Policy}

Historically, the US immigration policy has been relatively open
\begin{itemize}

\vspace{3mm}

    \item The share of US-based foreign-born individuals engaged in science and engineering degrees has been increasing
    \begin{itemize}
        \item The number of temporary visa holders earning bachelor's degrees in a science or engineering field more than doubled from 2000 (15,000) to 2015 (32,000)
        \item The number of foreign-born students in a science or engineering grad program increased from 128,000 to 240,000 from 2000-2015
    \end{itemize}
    \item Share of US-based foreign-born workers in STEM has also grown
    \begin{itemize}
        \item Among US-based foreign-born workers who have a bachelor's degree as their highest degree: 11.4\% worked in science and engineering occupation in 1993. 17.5\% in 2003, and 21.2\% in 2015
    \end{itemize}
    
\end{itemize}

\end{frame}

\begin{frame}{Degrees earned by temporary visa holders, 2000-2015}

\begin{center}
    \includegraphics[scale=0.60]{figure11_bachelors_graduate_revised.pdf}
    \end{center}
\scriptsize \textcolor{red!75!green!50!blue!25!gray}{Note: The x-axis plots the percentage of total bachelor’s degrees by sub-field that are earned by students on temporary visas between 2000 and 2015. The y-axis plots the same for doctoral degrees. Source: Appendix Tables 2-22 and 2-32 of National Science Foundation}

\end{frame}

\begin{frame}{Measuring immigrants’ contribution to US innovation}

\begin{itemize}

\item Immigrants have long been perceived as generating a disproportionate share of US inventions
\vspace{3mm}
\item While this perception has historically been based on anecdotes, recent empirical work attempts to use larger datasets to test this premise
\begin{itemize}
\item A series of papers by Bill Kerr uses ethnic name matching procedures to proxy for immigrant status
\item Hunt and Gauthier-Loiselle (2010) and Hunt (2011) use survey datasets measuring immigration status
\end{itemize}

\end{itemize}

\end{frame}


\begin{frame}{Bernstein et al. (2019)}

Bernstein et al. (2019) leverages a new linkage between the Infutor data and USPTO patent records to link immigration and US innovation

\begin{itemize}
\item From Infutor data on year of birth and first five digits of Social Security numbers, the authors infer immigrant status 
\item Linking immigrant status to USPTO records based on individual names and addresses allows them to tabulate various measures of immigrants’ contribution to US innovation
\item Immigrants account for around 10 percent of the population, but account for 16 percent of inventors and 22-24 percent of innovation (as measured by patents, weighted patent measures)
\begin{itemize}
\item The authors’ measures of innovation includes patents weighted for citations and market value, rejecting the view that immigrants produce lower quality patents
\end{itemize}
\end{itemize}

\end{frame}

\begin{frame}{Immigrants’ contribution to US innovation}

\begin{center}
    \includegraphics[scale=0.30]{figure12_share_of_immigrant_contribution_1.pdf}
    \end{center}
\scriptsize \textcolor{red!75!green!50!blue!25!gray}{Note: Adopted from Figure 2 of Bernstein et al. (2019)}

\end{frame}

\begin{frame}{Visas}

Current policy debate often centers on student, J-1, H-1B, and L-1 visas

\vspace{3mm}

\begin{itemize}
\item H-1B visas are granted to people working in a specialty occupation, and they require a higher education degree
\item J-1 visas are designed for work- and study-based exchange visitor programs
\item L-1 visas are granted to intracompany transferees in roles requiring specialized knowledge
\end{itemize}

\vspace{3mm}

Between 1987 and 2019, the number of H-1B, J-1, and L-1 visas increased substantially

\end{frame}

\begin{frame}{Immigrants’ contribution to US innovation}

\begin{center}
    \includegraphics[scale=0.30]{figure13_nonimmigrant_visas_1.pdf}
    \end{center}
\scriptsize \textcolor{red!75!green!50!blue!25!gray}{Note: This graph plots the number of H-1B, J-1, and L-1 visas granted in the US each year from 1987 to 2019. Source: US Department of State (2019)}

\end{frame}

\begin{frame}{H-1B visas}

Among visa types, H-1Bs have generated particularly strong attention as one of the primary mechanisms for bringing immigrants in science and engineering to the US

\vspace{3mm}

How are immigrants on H-1Bs impacting native workers?
\begin{itemize}
\item Peri et al. (2015) leverages the share of STEM workers who are foreign in each US city interacted with over-time change in the number of H-1Bs allocated to different nationality groups
\begin{itemize}
\item The authors find that H-1B workers raise native wages and total factor productivity in US cities.
\end{itemize}
\end{itemize}

\vspace{3mm}

How do skilled immigrants impact the employment structure of US firms?
\begin{itemize}
\item Kerr et al. (2015) finds that the overall employment of skilled workers increases with skilled immigrant employment by the firm
\end{itemize}

\vspace{3mm}

Thus, it appears that H-1B visa programs do not harm native workers, as is frequently assumed

\end{frame}

\begin{frame}{H-1B effect on innovation}

A number of papers have looked at the impact of the H-1B visa program on US innovation

\begin{itemize}
\item Kerr and Lincoln (2010) argues invention increases with higher H-1B visa admissions
\item Doran et al. (2014) finds no effect of H-1Bs on patenting after leveraging the sample of firm-worker pairs subject to H-1B visa lotteries
\begin{itemize}
\item Different results could be explained by Doran et al.’s focus on the effect of one additional H-1B visa on a single firm, holding constant visas to other firms; this may not account for crowded-out workers who find employment elsewhere.
\end{itemize}
\item Khanna and Lee (2020) finds H-1Bs are associated with higher product reallocation and revenue growth
\item Glennon (2020) documents novel evidence that H-1B restrictions cause multinational firms to substitute employment and investment to foreign affiliates
\end{itemize}

\end{frame}

\begin{frame}{Non-compete policies}

Non-compete agreements are another labor market policy that may affect innovation
\vspace{3mm}

\textit{Non-compete agreement}: An employment contract in which an employee pledges not to work for a competing firm for a period of time after resignation/termination {\scriptsize \textcolor{red!75!green!50!blue!25!gray}{[Marx and Fleming 2012]}}

\begin{itemize}
\item Non-competes, prohibited in California, are often cited as the reason why Silicon Valley was not located in Massachusetts {\scriptsize \textcolor{red!75!green!50!blue!25!gray}{[Gilson 1999]}}
\item Non-competes reduce the frequency of spin-outs from existing firms
\item However, they can encourage firm-specific investments in human capital and customer-supplier relationships {\scriptsize \textcolor{red!75!green!50!blue!25!gray}{[Franco and Mitchell 2008]}}
\item Marx et al. (2009) finds that average labor mobility dropped substantially after a 1985 policy change toward non-compete enforcement in Michigan
\end{itemize}

\end{frame}

\begin{frame}{Impacts of place-based policy}

\begin{itemize}
    
\item Location-specific policies may not alter aggregate R&D, but instead shift the location of research investments across policy regimes
\begin{itemize}
    \item R\&D tax credits, patent boxes, immigration and non-compete policies
\end{itemize}
\vspace{3mm}
\item Lerner (2012) provides an overview of government programs that have attempted to encourage economic activity through such place-based policies

\end{itemize}
    
\end{frame}

\begin{frame}
\frametitle{Summing up}

\begin{itemize}
    \item The productivity of an individual and the spillovers of their innovative activity depends on location, and can therefore be altered by immigration policy
    \item The number of skilled immigrants in the US is increasing, and existing evidence suggests immigrants account for a disproportionate share of US-based innovation
    \item Visas are an important policy lever for attracting skilled labor, and the influx of workers on visas does not appear to negatively impact native workers
    \item Non-compete agreements and other labor market institutions also appear to be quite important
\end{itemize}

\end{frame}

\end{document}