Analysis of Key Finding from "Immigration and American Jobs"

Summary

In December of 2011, the study "Immigration and American Jobs", written by economist Madeline Zavodny, was published. Page 4 of that study lists the following as the first of four main findings:

...from 2000 to 2007, an additional 100 foreign-born workers in STEM fields with advanced degrees from US universities is associated with an additional 262 jobs among US natives.

This analysis finds significant methodological problems with the study which indicates that its findings may be unwarranted. It consists of the following three parts:

Part 1 looks at the study's own data and attempts to replicate the above finding. Part 2 looks at replicating the study's data by extracting it from the original source. Part 3 looks at updating the study through 2013 and seeing the effect that has on the finding.

Key Issues for 2000-2007 California had over three times as many foreign STEM workers with advanced U.S. degress as the next highest state, New York, and over a quarter of the total in the United States. Over a quarter of the data points (one per each state and year) have no such STEM workers. The native worker employment rate used by the study incorrectly counts those not in the labor force, both retired and other, and the self-employed as unemployed. The results of the study depend strongly on the addition of dummy variables for state and year. As a result, the model implies that the major factors affecting the native employment rate are the state, the year, and the number of native foreign workers with advanced degrees. No consideration is given to any other factors, including other workers, foreign and native. After removing the predicted effects of the state and year, both the scatter plot and the correlation coefficient show very weak correlation. California, which has by far the most such workers, shows a negative correlation though at -0.1446, it's fairly weak. New Jersey and Oregon show stronger negative correlations of -0.5969 and -0.5362, respectively. Many states with a postive correlation show that it is often related to a decrease in both the native employment rate and the share of such workers. An extreme example is Michigan. It is possible to duplicate all key slopes in the study's findings with a model that includes the year, state, and 4 groups of foreign workers with a bachelor's degree or higher. Of these groups, foreign workers with only a bachelor's degree had a negative slope meaning that they are associated with a decrease in native jobs. For more information, conclusions are listed here. Key Issues for 2000-2013 The selection of 2000-2007 is critical to the slope of 0.0045 on which the 2.6 jobs number depends. For example, 2002-2009 gives a slope of -0.0020 and 2002-2007 gives a slope of 0.0005. Extending the study through 2013 decreases the slope of the regression from 0.0042 to 0.0034. Fixing the employment rate decreases the slope of the regression further to 0.0020 and greatly lowers the p-values of the first three regressions, indicating higher significance. For more information, conclusions are listed here. Following is a table of contents of the three parts with links to the analysis:

Part 1 - Replicating the Finding from the Study's Own Data

Part 2 - Replicating the Study's Data from the Original Source

Part 3 - Updating the Study Through 2013 and Seeing the Effect on the Finding

Source Code for R Programs Used in this Analysis

Note: The latest versions of the following code can be found on GitHub

Articles and Blog Posts Referencing this Analysis