Ricardo Hausmann
Says More…
This week in Say More, PS talks with Ricardo Hausmann, a professor at Harvard Kennedy School and Director of the Harvard Growth Lab.
Project Syndicate: Two years ago, you and Dany Bahar warned that the persistence of the anti-immigration bias that Donald Trump had stoked among policymakers could lead to stagnation in the United States. Now, Trump is back and promising not only tighter immigration rules, but also mass deportations. Where are the costs of this approach likely to appear first, and to what extent would providing more H-1B visas for high-skill workers, as some Trump allies advocate, offset the damage?
Ricardo Hausmann: Restrictions on immigration impede growth by reducing the labor supply and weakening innovation. Low-skill immigrants are important for many industries, such as construction and services. By offering care services, they also free up high-skill natives, especially women, to participate more fully in the economy. If the labor supply shrinks, the US Federal Reserve will have to keep interest rates higher for longer.
But there is another dimension to this discussion: immigrants are highly over-represented in entrepreneurship, innovation, science, and technology. To facilitate their continued contributions to US innovation and dynamism, the number of H-1B visas available should be radically increased. But H1-B visas are granted at the request of firms; the US also needs visas for entrepreneurs. And it needs to improve the ability of foreign graduates of American universities to stay in the US.