Here’s a new and very timely paper from Giovanni Peri, Kevin Shih, and Chad Sparber.
ABSTRACT: Scientists, Technology professionals, Engineers and Mathematicians (STEM workers) are the fundamental inputs in scientific innovation and technological adoption which, in turn, the main drivers of the productivity growth in the US. During the last thirty years productivity growth appeared to be “college” biased, in that it increased demand and productivity of college educated much more than that of other workers. In this paper we identify STEM workers in the US and we look at the effect of their growth on the growth of wages and employment of college and non-college educated in 219 US cities during the period 1990-2010. In order to identify a supply-driven and heterogenous increase in STEM workers across US cities we use the “dependence” of each city on foreign-born STEM workers in 1980 (or 1970) and we exploit the introduction and the variation (over time and across nationalities) of the H1B visa program directed specifically to allow access into the US to professoional STEM workers. We find that H1B-driven increases in STEM workers in a city were associated with significant increases in wages of college educated natives, (in general as well as STEM). Non-college educated natives, instead, experienced non significant effects on their wages and on their employment. We also find evidence that STEM workers increased the price of housing for college graduates and the specialization in high human capital sectors and high cognitive occupations in US cities. The magnitudes of these estimates imply that STEM workers contributed significantly to total factor productivity growth in the US and across cities and also, but to a lesser extent, to the growth of the skill biased during the 1990-2010 period.