Research

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 frontier skills and knowledge through experiential learning, enhancing entrepreneurial capabilities and facilitating startup founding upon return. Using career histories of 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 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 3.88 percentage points (80% relative to the mean) and high-growth startups by 1.46 percentage points (218% 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, business, and the social sciences. U.S. professional experience also increases the likelihood that science- and engineering-trained returnees 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 experiential learning in advanced host countries as a driver of returnees' entrepreneurial capabilities and activity, contributing to the literature on returnee entrepreneurship, the origins and transfer of firm capabilities, and human capital accumulation and entrepreneurship, with implications for immigration and emigration policies.

We study the effects of a change to the Optional Practical Training program which allowed temporary-resident graduates of US STEM programs to spend more time in the US after completing their studies. Masters’ graduates in cohorts of international (temporary-resident) students affected by this policy change 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. Computing is the specific work activity exhibiting the greatest increase among temporary residents, followed by basic research.