The US should be Talent-Maxxing

Let their people come, and let them serve out people.

When you jam really talented people together in a small space, good things start happening.

The economic literature is clear on the benefits of agglomeration. High-skill workers produce more when they cluster in cities, in top universities, and in the best companies. And the benefits of improved productivity spill over to society at large.

This leads to a clear conclusion: The US should be Talent-Maxxing.

We should attempt to collect within our borders all of the most talented scientists and technical minds, in the world¹.

Talent-Maxxing means doing two things:

1. Deeply investing into developing American talent. This is something basically everyone agrees we should do in theory. It’s not a topic to which I feel I have much to add, other than to say we certainly can and should do much better than we are now.

2. Acquire all the best non-American talent in the world. Not everyone agrees that we should do this, and this post will focus on arguing that we should. But it should be remembered that #1 is equally if not more important.

So why should the US try to hoover up all the world’s best scientist and technologists? In short, because we can put them to work making life better for Americans and for the world.

Attracting top talent is a big a win for us US citizens. The most talented immigrants:

• Build great companies that benefit the public. Better access to talent improves firm performance, which drives economic growth. The 62% of Americans who own stock are the beneficiaries of this growth.

• Create jobs for Americans. Studies find skilled migration increases employment of native Americans on balance².

• Contribute wealth towards the US treasury. The average college-educated immigrant contributes on the order of $1M to the US treasury over 30 years.

• Generate positive externalities for all Americans. When an immigrant scientist develops a life-saving drug or an immigrant engineer builds a better product, the benefits spill over to everyone who uses them.

In fact the spillover effects from improved medicine, scientific advancements, and new technology do not end at our borders. When the state of the art advances, the entire world benefits.

Now you might be worried that trying to attract all the most talented people in the world would mean that the rest of the world is left talentless. Don’t worry.

1. The supply of talent is elastic. Talent comes as a result of investment into human capital. Often when people have opportunities to move abroad, they invest more in education, which can have positive talent spillover effects in their country of origin.

2. Other countries will continue compete with us for talent. If the US invested more heavily in obtaining all the world’s top talent, other countries would step up their game. They would improve incentives to immigrate, easing visa barriers, and improve policies. The net result being better global options for the world’s best talent³.

3. The migrants do not always stay in the US forever. The general finding is that “between 30% and 60% of migrants will likely return to their home country within ten years.” When they return, the bring new skills, and US connections that benefit their home country.

This is not even to mention the fiscal benefits that accrue to family and friends in origin countries as a result of remittances (typically 10-15% of immigrant earnings). In general we should not be worried about brain drain.

And of course, making the US more attractive to global talent benefits those talented individuals themselves⁴.

What would Talent-Maxxing actually look like? Some initial thoughts:

• Be unapologetic about the fact that we want the world’s most talented people to come to the US and become American.

• Reform our immigration system to focus on skills. Much has been written about specific policy proposals here. Wage-ranking the H-1B would be a great start⁵.

• Build the critical talent infrastructure to allow public and private actors to identify, evaluate, and develop global talent in the US interest.

We are lucky enough in the US to have culture, ideals, and an economy that many around the world aspire to. We have our pick of who we let in, and we should let in the people who will clearly benefit American citizens.

So let their people come, and let them serve out people.

1. I’ll focus on the tech industry because it’s what I know best, but most of what I’m saying applies to other fields such as art, education, healthcare, and other kinds of business.

2. The finding is not universal - you can find papers that point mildly in the opposite direction - but if you take the literature as a whole, on balance it really does seem like skilled workers create rather than destroy jobs for native-born Americans.

Note also that the H-1B program has well-documented problems. We can do much, much better than this.

3. In any case it is quite hard to morally justify restricting immigration in order to keep people in countries they would rather leave.

4. Clearly much of the world’s top talent already sees the US as an attractive destination. And for elite technical talent, the US is clearly the place to be. The already-existing agglomeration of talent, deep capital markets, English-language, and acceptance of multicultural identity allows immigrants to the US to unleash productivity in a way nowhere else can.

5. If needed as a part of a compromise with those concerned about the overall level immigration, it would make sense to reduce or eliminate some categories of family-based immigration. And improved (humane but strict) border and overstay enforcement is of course table stakes for any comprehensive immigration reform.