Economic Impact of STEM Immigrant Workers
Christopher F. Baum, Hans Lööf, and Andreas Stephan.
In every developed country, the supply of workers in STEM fields (science, technology, engineering, mathematics) often falls short of technology-related firms’ demand for labor. As manufacturing industries become more high-tech and service industries are adopting new technologies, the availability of workers with the appropriate skills is a growing concern.
A potential source of STEM-qualified workers are those who are migrants, either those seeking a better economic environment or those who are international refugees. In this paper, we analyze the labor market outcomes of STEM workers in a developed economy, Sweden, over the period 2011–2015. The empirical analysis makes use of very detailed administrative data from Statistics Sweden drawn from the population of Swedish workers, linked to the firms in which they are employed.
We find that firms with a sizable presence of immigrant STEM workers are more likely to hire additional immigrants. The average wages paid by those firms tend to be higher the greater is the share of immigrant STEM workers, perhaps reflecting the firm’s higher productivity. Although populist sentiment in many developed countries discourages immigration, we find that STEM-qualified immigrants have a positive effect on firms’ performance and the wages of both native-born and immigrant workers.
October 8, 2018