Immigration and Comparative Advantage
Analyses of trade among advanced economies, which have similar costs of labor and factor endowments, posit that trade occurs because countries gain comparative advantage from being the first-mover on new technologies and/or from increasing returns—say through learning as output increases or through positive spillovers from one firm to another or from sector to sector. Comparative advantage in turn induces factor mobility, which can alter factor endowments. The United States is a prime example of a country where immigration has responded to the country’s technological edge and added to its comparative advantage. The United States has a comparative advantage in exporting relatively high-tech prod- ucts. It imports science and engineering specialists, who help the country maintain its position at the technological frontier. During the 1990s, the United States greatly increased the proportion of foreign-born workers among scientists and engineers, as shown in Table 3. Nearly 60 percent of the growth in the number of U.S.-based Ph.D. scientists and engineers over this decade came from the foreign-born.