The Real Cost of Turning Away Foreign Talent

There are many ways to measure the health of a country. One way is growth of gross domestic product (GDP). Another is economic productivity. But there’s a less conventional measure worth watching: Do the world’s most talented and ambitious people want to immigrate here?

Throughout most of America’s history, the answer has been an emphatic yes. Scientists, engineers, entrepreneurs, artists, and strivers from around the world have chosen the United States because they believed they could build something, discover something, or start a business while making a better life in this country.

We should worry about the day when this is no longer true.

Unfortunately, the Trump administration seems determined to make that day arrive sooner rather than later. Its destructive embrace of protectionism is not merely directed against foreign goods and capital. It’s not limited to low-skill immigrants, either. It’s also directed against in-demand foreign talent.

For instance, a rule finalized in early July replaces “duration of status” for foreign students, exchange visitors, and foreign journalists with fixed admission periods. In other words, it forces international students to seek government approval to stay beyond four years, regardless of whether their studies can be completed that quickly. It also makes it more difficult for international graduates of American universities to stay and work after graduation through the Optional Practical Training program.

A recent brief by Amy Nice, Michael Clemens, and Jeremy Neufeld of the Peterson Institute for International Economics highlights the stakes. The authors examine the pipeline through which international students—particularly those studying science, technology, engineering, and mathematics—enter American universities and eventually the American workforce. It is an enormously valuable pipeline for all of us.

The authors found that America’s science and technology workforce depends heavily on talent from abroad. Immigrants fill almost one in three advanced STEM positions and nearly one in two requiring a doctorate. People who first entered the country to study represent about one-fifth of degree-holding STEM workers and more than one-third at the Ph.D. level.

Clemens explains that the STEM students who stay in the U.S. after graduation “patent new inventions at four times the rate of typical college graduates and are responsible for around 10 percent of all new inventions patented in the United States. They found high-growth startup companies at six times the rate of US-born graduates.”

That means we can dispense with the idea that if a foreign engineer gets a job, an American engineer must have lost one. Protectionism applied to human capital relies on the same economic fallacy that underlies other forms of protectionism: the belief that the economy is like one pie, and hence, allowing foreign interests to take a seat hurts those already at the table.

Economies don’t work that way. Talented people don’t merely fill existing jobs. They create them by inventing products, starting companies, conducting research, and making the people around them more productive. In the process, they create opportunities for other people that otherwise wouldn’t exist.

Giving a cold shoulder to foreign students is particularly absurd when you consider Washington’s obsession with competing against China. Politicians insist that America is engaged in an existential technological race. They spend billions of dollars subsidizing semiconductors and other favored industries. They develop elaborate industrial policies intended to make America dominant in artificial intelligence, quantum computing, and advanced manufacturing.

Then, when a potentially brilliant young scientist from India, China, or anywhere else earns an advanced degree at an American university and wants to stay and contribute to the American economy, our government says perhaps they should leave.

You can throw billions of taxpayer dollars at a semiconductor factory in Arizona. You cannot manufacture genius through an appropriations bill.

The Peterson researchers estimate that discouraging just one-third of international STEM graduates could leave the American economy 0.7 percent to 1.3 percent smaller, or roughly $200 billion to $400 billion in GDP over a decade—equivalent to losing the entire economy of Utah or South Carolina.

Those estimates necessarily depend on assumptions about future immigration and productivity, but we don’t need to know the precise numbers to understand the effect. When productive people leave—or never arrive—we lose their ideas, businesses, discoveries, and all the related economic activity.

There is also something deeper at stake. One of America’s greatest strengths is that people vote for this country with their feet. They leave familiar places, sometimes traveling thousands of miles, because of possibilities unavailable elsewhere. It’s an extraordinary vote of confidence in American institutions: our markets, rule of law, and culture of entrepreneurship. We should never take it for granted.

Indeed, the possibility that the world’s brightest young people will decide that America is no longer worth the trouble should terrify us. Not simply because we will lose their economic contributions, but because their decision will tell us something about what America has become.

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