New Kauffman Study on Departing Immigrants Both Illuminating and Nonsensical

Today, the Kauffman Foundation published a controversial study titled “America’s Loss is the World’s Gain,” in which former tech entrepreneur Vivek Wadhwa and several co-authors suggest that while the U.S. worries about nimble foreigners taking American jobs, smart immigrants are returning to their home countries in droves.

It’s a trend that could ultimately hurt the U.S., they argue (and Wadhwa tells the New York Times).

Except the study itself suggests that the U.S. has little to do with why immigrants have been heading home.  Of the people surveyed for the study —  just 1,203 Indian and Chinese professionals who studied or worked in the United States for a year or more before returning home — visa issues were not the primarily reason they’d left. In fact, 26.9 percent of the Indian respondents and 34 percent of the Chinese respondents held green cards or U.S. Citizenship, and overall, 67 percent said that considerations regarding their visa didn’t contribute to their decision to return to their home country.

What called them home instead? A significant majority (84 percent of Chinese and 68.7 percent of Indians) said they believed their home countries provided better career opportunities. Most also said they wanted to be closer to friends and family, particularly aging parents.

It’s what so strange about the Kauffmann study, which apparently came together over two years. Its authors repeatedly draw conclusions that contradict the data they present. For example, though Wadhwa told the Times today that a “trickle [of immigrants departing the U.S.] is turning into a flood,” the study itself states that “we unfortunately lack data on the number of immigrants who have chosen to remain in the U.S. rather than return home.”

Maybe Wadhwa is right that the number of immigrants returning home is on a steep incline, but if his evidence is anecdotal, he should say so.

The study also makes a leap in arguing that the U.S. is doing a lousy job of keeping skilled foreigners in the U.S. Again,  it may be the case. I’ve read numerous stories of immigrants, here on H-1B visas, having to return home after being laid off from their jobs in recent months; there are also roughly one million people with H-1B visas, waiting to receive longer term visas. Yet the study itself states that “visa problems did not surface as the primary factor in losing these talented immigrants” and that “beyond education, respondents to the survey were not definitive on whether they would return to the U.S. if given a permanent visa and an equivalent job opportunity.”

Am I missing something?

For what it’s worth, I think it’s detestable that our new bank bailout legislation includes language that discourages the recipient financial institutions from recruiting foreigners on work visas, even if it means little, practically speaking. (For one thing, the limits don’t affect outsourcing vendors that provide IT services to the financial sector. It’s also estimated that in the financial services and banking sector, less than 1 percent of workers have H-1B visas.)

And like many people in Silicon Valley, I’m a longtime proponent of more open borders.  According to the NVCA, roughly half of today’s venture-backed startups have immigrant founders, and over the past 18 years, immigrants have founded 25 percent of all U.S. public companies that received venture capital.

I’m just confused as to why this otherwise interesting study is being used to make a separate, political case, on very flimsy grounds.

We’re  in the middle of a recession that’s put millions of people out of work, including growing tens of thousands of professionals in the high-tech sector. If some immigrants are taking the opportunity to return home, both to be closer to their families and to capitalize on opportunities that no longer exist here and may not for some time, why use that data as some kind of cudgel? Isn’t the news out there bleak enough?

3 Comments

  • Don’t know if my last message got posted!

  • [...] Loizos, at PEHub, a public forum Private Equity, sees some inconsistencies between the paper and comments made to [...]

  • Data I have seen specifically for Silicon Valley is very much like what you are saying:
    – people come and leave, they tend to stay on average 4 years, and then they go back from wherever they come from, somewhere else in the US or back to their country.
    And actually this is probably part of the positive things that happen in Silicon Valley.
    I don’t think there is any reason to worry.
    A couple of positive thoughts in this area:
    – The US is a market and it is a brand. For software in general, made in the US is perceived as a label of quality, just like good watches are made in Switzerland. So people will keep coming here to associate themselves with that brand, and to try to address this market which is mature and huge. Note that I recently also read that many donors from India and China choose to give to US Universities rather than universities in their own country. They may be these same people who were here once and left.
    Things may change over time but there are still good days ahead of us.
    – Typically during a recession, things start picking up in the US first before they pick up other places, so while a lot of people are going back home, there are also many entrepreneurs coming to the US while it is fairly cheap to do so, to position themselves to benefit from the lift early when things start turning around.
    I have not read the Kauffman study, but I agree with you that even if it is worth watching, we should not panic about a reverse brain drain, because it has always been the case that people go back and forth…

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