Innovation and immigration - Insights from a placement policy

- We study the impact of immigration on innovation in a quasi-experimental setting.
- We exploit a placement policy which exogenously allocated immigrants to German regions.
- The majority of inflows were low skilled.
- Panel estimates do not provide any support for a negative effect on innovations.
- Immigration had no or even a positive impact on innovations.

We examine the impact of immigration on innovation by exploiting a placement policy for immigrants in Germany. This allows us to overcome the potential bias of endogenous location decisions. Although the majority of inflows was unskilled, we do not find any evidence of a negative impact on innovations. Instead, our panel estimates suggest that immigration had no or even a positive impact on innovations.