POLISH IMMIGRANTS STIMULATE GERMAN INNOVATION

22 Mar 2018

Even in an immigration system that is not based on skill selection, immigrants have positive effects on innovation. They contribute directly to patenting activities, but they also have positive spillover effects on inventors already living in the country.

These are the findings of research on the effects of Polish immigration to Germany by Katharina Candel-Haug, Alexander Cuntz and Oliver Falck, to be presented at the Royal Economic Society''s annual conference at the University of Sussex in Brighton in March 2018.

Their study juxtaposes the effects of Polish immigration to Germany, which covers all qualification levels, to H1-B immigration to the United States, which is restricted to highly qualified individuals. Among the findings:

• Immigration of Polish citizens of all qualification levels has a positive impact on innovativeness in Germany.

• Polish immigration leads Germans to patent more, so the new arrivals do not substitute local inventors but complement their work.

• In contrast to the German case, in the qualification-based US immigration sys-tem, immigrants patent more themselves but do not have a significant impact on locals'' innovativeness.

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This study analyses the largest immigrant group from the new member states that joined the EU in 2004: Poles. Work permits for Poles in Germany around the enlarge-ment were issued for all qualification levels and Polish citizens in Germany have a very heterogeneous qualification distribution including university graduates and low-skilled workers. This is in contrast to the United States where H1-B candidates must possess at least a bachelor''s degree in order to be granted a work visa.

In the years 2001-2010, for 10% more Polish immigrants coming to Germany the num-ber of Polish inventors increased by 0.29%. This contribution seems to be small but it is still one eighth of the direct patenting effect of qualification-selected immigrants in the United States.

The same rise in Polish immigration is also associated with an increase of 0.31% in the number of German inventors. So the new arrivals do not replace locals but stimu-late their work. For the United States, there is no such significant spillover effect.

The results show that some of the Polish immigrants in 2001-2010 were highly quali-fied inventors that pursued their career in research and development in Germany. The spillover effects are even slightly higher: Polish migrants brought important comple-mentary skills or knowledge, such as ideas for new products, access to new markets, particular management or consulting capabilities, which pushed Germans to patent more.

The authors conclude that even in a non-selective immigration system, innovation ef-fects are significant. Also, the new arrivals do not substitute locals but are comple-ments to their innovation activities. In the public debate, which is often focusing on the costs of immigration, such complementarities should be taken into account.

The central data used for this research cover information on inventors in Germany in-cluding their nationality and place of residence. This new dataset from the World Intel-lectual Property Organization (WIPO) allows the authors a precise attribution of inven-tors to the immigrant or the local group.

The study explores the impact Polish immigration had in 2001-2010 on the number of inventors of Polish or German nationality in German counties. The approach allows direct comparison with effects found for the United States and therefore the juxtaposi-tion of a non-selective and a qualification-based immigration system.

''Immigrants'' Contribution to Innovativeness in Germany'' - Katharina Candel-Haug (ifo Institute, Germany), Alexander Cuntz (WIPO, Switzerland) and Oliver Falck (ifo Institute and University of Munich, Germany)

Katharina Candel-Haug

candelhaug@ifo.de