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Immigrants arriving at Ellis Island, May 27, 1920. A recent study breaks new ground on the benefits of immigration to innovation by focusing on where immigrants decide to live and work. INP B\/W PHOTOGRAPH.<\/p>\n
Bettmann Archive<\/p>\n
A recent study breaks new ground on the benefits of immigration for innovation by focusing on where immigrants choose to live and work. The research is relevant to Silicon Valley and other innovation hubs and refutes White House Deputy Chief of Staff Stephen Miller\u2019s<\/a> argument that reducing immigration will improve America\u2019s economy.<\/p>\n The study finds that restrictions imposed in the 1920s, which Miller has praised as a model for the present day, harmed innovation and reduced the economic well-being of Americans. The research is the latest in a series of findings that contradict the Trump administration\u2019s rationale for restricting employment-based<\/a> immigration, curtailing the entry of international students<\/a>, eliminating non-white refugee admissions and engaging in mass deportation.<\/p>\n Immigration Research Finds Immigrants Benefit Americans By Where And How They Work<\/p>\n A new study<\/a> finds that immigrants benefit the U.S. economy, growth and innovation. First, \u201cthe size of the local workforce increases the return to innovation so that immigrant inflows induce innovation by native (U.S.-born) skilled workers,\u201d according to a study published by the National Bureau of Economic Research authored by Costas Arkolakis (Yale), Sun Kyoung Lee (Univ. of Michigan) and Michael Peters (Yale). Second, \u201cthe skill composition of the local population determines the local innovation rate: an inflow of skilled immigrants thus contributes to the creation of ideas.\u201d Third, \u201cspatial differences in the quality of the local knowledge pool imply that the productivity of innovators differs across labor markets. Immigrants\u2019 bias to move to innovative urban centers thus has a direct effect on innovative activity.\u201d <\/p>\n The economists examined the years from 1880 to 1920 and found that immigrants contribute to U.S. productivity, including by choosing to live where their skills complement American workers. Many immigrants during that period settled \u201cin the urban innovation hubs of New York, Chicago and Philadelphia, where most innovative activity took place.\u201d <\/p>\n \u201cWe find that the inflow of immigrants during the Age of Mass Migration played an important role in U.S. innovation and growth: without the inflow of international migrants between 1880 and 1920, aggregate GDP (Gross Domestic Product) per capita would have been 8.2% lower by 1940,\u201d according to Arkolakis, Lee and Peters.<\/p>\n The study\u2019s finding that where immigrants choose to live helps spur growth and innovation is supported by recent National Foundation for American Policy research<\/a> determining 59% of U.S. billion-dollar companies had an immigrant founder or cofounder. \u201cA total of 244 of the 455 (54%) unicorn companies with an immigrant founder or cofounder are headquartered in the San Francisco Bay Area, which includes Silicon Valley and the surrounding San Francisco area,\u201d concluded the NFAP study (I authored the research). \u201cOverall, 350 of the 775 (45%) unicorns (as of April 2026) are headquartered in the Bay Area. In sum, 70% of the Bay Area\u2019s unicorn companies have an immigrant founder.\u201d<\/p>\n \u201cClusters of people with specific skills really matter for innovation,\u201d said labor economist Mark Regets, an NFAP senior fellow, in an interview. \u201cThis is a reason why high-skilled immigration really matters, because you need to allow people to move to clusters, and it is massively in the U.S. interest for it to happen on American soil.\u201d New York has 82 immigrant-founded unicorn companies, followed by 30 for Boston, Cambridge and the surrounding area, Chicago has 11, Bellevue, Washington has six and Los Angeles has five (more if one counts nearby cities).<\/p>\n The 1924 Immigration Act reduced the flow of immigrants to the United States by approximately 90% and blocked Jews, Eastern Europeans and Asians, which harmed America economically by reducing labor force growth, the country\u2019s available human capital and its innovative capacity. However, Stephen Miller, the architect of the Trump administration\u2019s immigration policy, has praised the 1920s national origins legislation. \u201cDuring the middle of the 20th century\u2014when the U.S. achieved unquestioned global scientific dominance\u2014there was net zero migration,\u201d Miller wrote (on May 31, 2025) on X.com.<\/p>\n Analysts point out that Miller\u2019s statement overlooks the significant scientific achievements produced by immigrants in the post-war period. Between 1945 and 1974, 16 of the 30 U.S. winners of the Nobel Prize in physics were immigrants, according to NFAP. During those same years, 15 of the 36 U.S. Nobel Prizes in medicine were awarded to immigrants. Albert Sabin, an immigrant from Poland, and Jonas Salk, the son of an immigrant, developed the vaccines that ended polio as a threat to Americans. Immigrants were also crucial to developing the atomic bomb.<\/p>\n \u201cImmigrants have been awarded 40% of the Nobel Prizes won by Americans in chemistry, medicine and physics since 2000,\u201d according to an analysis<\/a> by the National Foundation for American Policy. <\/p>\n Other Immigration Research Also Contradicts Current White House Policies<\/p>\n Miller\u2019s belief that reducing immigration helps innovation is not supported by economists. According to research<\/a> by New York University economists Petra Moser and Shmuel San, the restrictive immigration quotas of the 1920s significantly reduced invention in the United States, including by American-born scientists. \u201cAfter the quotas, U.S. scientists produced 68% fewer additional patents in the pre-quota fields of ESE-born [Eastern and Southern European immigrant] scientists compared with the pre-quota fields of other U.S. scientists,\u201d write Moser and San.<\/p>\n Economic growth relies on labor force growth and productivity growth, and immigrants are essential to both, particularly given the aging U.S. workforce and the key role they play in boosting productivity.<\/p>\n \u201cThe Trump administration\u2019s policies on illegal and legal immigration would reduce the projected number of workers in the United States by 6.8 million by 2028 and by 15.7 million by 2035 and lower the annual rate of economic growth by almost one-third, harming U.S. living standards,\u201d according to an NFAP analysis<\/a>.<\/p>\n