Research

We ask whether STEM extensions of the Optional Practical Training (OPT) program, which lengthened the period that temporary-resident graduates of U.S. STEM programs could work in the United States after graduation, affect firms' allocation of workers to tasks. Using national survey data on Master's graduates, we estimate a triple-differences regression comparing employees' skill–job match by temporary-resident status and STEM OPT eligibility. Master's graduates in cohorts of international (temporary-resident) students affected by these policy changes are more likely to perform tasks or work in occupations closely related to their fields of study. The increase is restricted to those employed in industry and those trained in computer science or engineering. We also find evidence of increased engagement in basic research among affected workers. This paper sheds light on an intraorganizational mechanism through which longer employee time horizons may affect firms' managerial decisions on human-capital allocation and, in turn, can promote innovation.

This paper examines whether and how professional experience in the United States, a leading host country at the global knowledge frontier, shapes the rate, quality, and direction of returnee entrepreneurship. U.S. professional experience enables migrants to acquire geographically concentrated frontier skills and knowledge that are transferred and utilized for startup founding upon return. Using career histories of approximately 210,000 returnees from 154 home countries who earned a U.S. degree between 1991 and 2020, I estimate the effects of prior U.S. professional experience on startup founding, high-growth startup founding, and the types of startups founded. I instrument for the length of U.S. professional experience using (i) the 2004 H-1B cap reduction and the introduction of home-country-specific U.S. visa categories, and (ii) green card waiting times at graduation. A one-year increase in U.S. professional experience raises returnees' propensity to found startups by 3.93 percentage points (81% relative to the mean) and high-growth startups by 1.47 percentage points (219% relative to the mean). The increase in entrepreneurial entry is largest in the knowledge-intensive sector and is concentrated among returnees trained in hard science & engineering or business fields. U.S. professional experience also increases the likelihood that returnees trained in hard science and engineering found startups whose core activities rely on science and engineering skills and knowledge. The entrepreneurial entry effect is concentrated among returnees from developing countries. These findings highlight the role of professional experience in advanced host countries as a driver of returnees' entrepreneurial activity, contributing to the literature on returnee entrepreneurship, the geographical concentration and transfer of skills and knowledge for entrepreneurship, and human capital accumulation and entrepreneurship, with implications for immigration and emigration policies.