Our economy benefits when immigrants do jobs Americans do not want to do. I recently discussed grapefruit picking, as an example of manual labor jobs. Today I’ll consider another job that Americans do not want, my job as an economics professor.
Economics professors are an example of Ph.D.’s in science, engineering and math, collectively referred to as STEM fields. (Add technology to the prior list to get the acronym.) This case adds a complication relative to grapefruit, because some Americans currently have Ph.D.’s in STEM fields, while almost no Americans pick grapefruit.
I think that I have a great job, so I’m surprised that few Americans want my gig. But the statistics show otherwise. In 2014, U. S. citizens (and permanent residents) earned 39% of economics doctorates awarded by U.S. universities. Americans earned less than 30% of doctorates in computer engineering and electrical engineering, and less than 40% in fields like chemistry, finance, computer science, and statistics. The composition of the work force reflects Americans’ disinterest, as almost 40% of workers with Ph.D.’s in STEM fields are foreign born.
Our nation benefits enormously from “importing” bright men and women for graduate study in economics and then employing them as professors. To see this, imagine what would happen if only Americans could work as Ph.D. economists in the U.S.
First, we would need to get a lot more Americans to enroll in economics Ph.D. programs. This would not be easy, as I can attest from years of encouraging economics majors to consider graduate school. Many students find the prospect of another four (or more!) years of study beyond completion of a bachelor’s degree daunting. Economics majors have one of the highest average starting salaries, so our students can already make good money. And graduate school, especially the first year, is much more demanding than undergraduate studies.
Substantially higher salaries for economics professors would increase the number of Americans getting Ph.D.’s. If economics professors made $500,000 a year, this would probably attract enough American students to fill all of the current Ph.D economist jobs. But if you think college is expensive now, imagine what tuition would be if economics (and STEM field) professors all made $500,000 annually.
Salaries would not rise this much, because universities, businesses and governments would hire fewer economists as salaries rose. Not hiring as many Ph.D. economists would have other consequences, like larger class sizes and businesses doing without a high level of analysis. Perhaps the market would balance at salaries of $300,000 per year.
The cost of employing only Americans with STEM Ph.D.’s would extend well beyond the university. University of California – Davis economist Giovanni Peri estimates that foreign-born scientists and engineers working in the U.S. contributed 10 to 20 percent of our economy’s productivity growth between 1990 and 2010. Professor Peri estimates that GDP is 4% higher than it would be without the contributions of foreign-born scientists and engineers.
We do not have to miss out on this productivity, or run up the cost of college, because qualified doctoral degree holders are willing to work for the salaries currently paid. And beyond their economic contributions, they add to the diversity and character of communities across our nation, including Troy.
Let’s now consider the complication, namely that some Americans are economics professors or Ph.D. scientists. Allowing foreign-born economics professors certainly makes me worse off. My salary would be substantially higher if we excluded immigrants. That would be a nice raise for me! The $300,000 figure mentioned above might be wishful thinking, but the general point holds: Americans with specialized training or skills will make less when we allow comparably qualified individuals to immigrate.
Preventing foreign-born Ph.D.’s from working in the U.S. would cost our economy enormously, and curtail the life choices of these immigrants. Ph.D. holders already earn salaries well above the national average, so the case for harming the economy to help the already well-off is weak. Besides, I already think I have the best job in the world!
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Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.