Contact:
Rossana Weitekamp, 516-792-1462, rossana@weitekamp.com
Barbara Pruitt, 816-932-1288; bpruitt@kauffman.org, Kauffman Foundation
Economic and professional opportunities top list of reasons
(KANSAS CITY, Mo.) March 2, 2009 – The Ewing Marion Kauffman Foundation released a study today that indicates placing limits on foreign workers in the U.S. is not the answer to the country's rising unemployment rate and may undermine efforts to spur technological innovation.
For the study by Harvard professor Vivek Wadhwa titled America's loss is the world's gain: America's New Immigrant Entrepreneurs, Part IV, researchers surveyed highly skilled immigrants who had studied and/or worked in the United States and subsequently returned to their home countries.
"A substantial number of highly skilled immigrants have started returning to their home countries in recent years, draining a key source of brain power and innovation," said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. "We wanted to know what is encouraging this much-needed growth engine to leave our country, thereby sending entrepreneurship and economic stimulus to places like Bangalore and Beijing."
Immigrants historically have provided one of America's greatest competitive advantages. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants bring high levels of education and skill to the United States. Immigrants have contributed disproportionately in the most dynamic part of the U.S. economy—the high-tech sector—co-founding firms such as Google, Intel, eBay and Yahoo. In addition, immigrant inventors contributed to more than a quarter of U.S. global patent applications. Immigrant-founded U.S.-based companies employed 450,000 workers and generated $52 billion in revenue in 2006.
"While some have tried to associate the increase in foreign workers over recent years with the economic problems that have plagued the country, this data verifies the opposite effect," said Wadhwa. "If the U.S. Government and the business community could find better ways to offer good jobs in tandem with less restrictive visa policies for talented immigrants, the U.S. might be able to recapture many of these immigrants and their potential to help grow the U.S. economy."
In the two-year study of 1,203 Indian and Chinese subjects who had studied or worked in the United States for a year or more before returning home, Wadhwa and his team uncovered several trends:
- Most of the Indian and Chinese immigrant subjects who returned to their home countries were relatively young (35 and 37, respectively), male, married and had no children.
- These returnees had degrees primarily in management, technology or science, with most holding Master's and PhD degrees.
- Most returnees originally came to the Unites States for professional and educational development opportunities, and the majority of returnees cited career and quality of life as the main reasons to return to their home countries rather than stay in the United States.
- The most common professional factor (86.8 percent of Chinese and 79.0 percent of Indians) motivating workers to return home was the growing demand for their skills in their home countries.
- Returnees also believed that their home countries provided better career opportunities than they could find in America.
- Family considerations are strong magnets pulling immigrants back to their home countries, as well. Being close to family and friends was a significant consideration in the decision to return home, with many returnees considering care for aging parents to be much better in their home countries (89.4 percent of Indians and 79.1 percent of Chinese).
- Since returning home, 56.6 percent of Indians and 50.2 percent of Chinese respondents indicated that they would be likely to start a business in the next five years, but they believed their best opportunities for entrepreneurship were at home (53.5 percent of Indian and 60.7 percent of Chinese respondents said opportunities to start their own businesses were better in their home countries).
