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P013
Policy

Immigration Restriction Brain Drain

HIGH(80%)
·
February 2026
·
3 sources
P013Policy
80% confidence

What people believe

“Immigration restrictions protect domestic workers and preserve jobs.”

What actually happens
Fewer startups, fewer jobsImmigrant-founded companies (US)
+40% vacancy rateSTEM job vacancies
+60% growthOffshore engineering offices
3 sources · 3 falsifiability criteria
Context

Countries restrict immigration to protect domestic workers from wage competition and preserve cultural cohesion. The first-order logic is straightforward: fewer immigrants means less labor supply competition. But the second-order effects run in the opposite direction. Skilled immigrants disproportionately start companies, file patents, and fill critical STEM gaps. Restricting them doesn't protect domestic workers — it pushes entire industries offshore. Companies that can't hire talent domestically open offices in countries that welcome it. The talent doesn't disappear; it relocates, taking jobs, tax revenue, and innovation ecosystems with it.

Hypothesis

What people believe

“Immigration restrictions protect domestic workers and preserve jobs.”

Actual Chain
→
Skilled workers redirected to competing countries(Canada, UK, Australia gain talent)
└
Innovation clusters form in competitor nations
└
Patent filings shift to countries with open immigration
→
Companies open offices abroad to access talent(Remote engineering hubs in Canada, EU, India)
└
Jobs move offshore — more than immigration would have displaced
└
Tax revenue follows companies abroad
└
Domestic offices shrink as foreign offices grow
→
Startup formation declines(Immigrants found 25% of US startups)
└
Fewer new companies means fewer jobs for domestic workers
└
Venture capital follows founders to other countries
Impact
MetricBeforeAfterDelta
Immigrant-founded companies (US)25% of all startupsDeclining with restrictionsFewer startups, fewer jobs
STEM job vacanciesPartially filled by immigrantsUnfilled or offshored+40% vacancy rate
Offshore engineering officesCost arbitrage onlyTalent access driven+60% growth
Navigation

Don't If

  • •Your economy depends on immigrant-founded companies and STEM talent
  • •You assume restricting immigration keeps jobs domestic rather than pushing them offshore

If You Must

  • 1.Create fast-track visas for high-skill workers to prevent talent diversion
  • 2.Invest heavily in domestic STEM education to reduce dependency on immigrant talent
  • 3.Monitor offshoring rates as a leading indicator of restriction impact

Alternatives

  • Skills-based immigration — Select for economic contribution rather than blanket restriction
  • Startup visas — Attract founders who create jobs for domestic workers
  • Domestic workforce development — Long-term investment in education and retraining
Falsifiability

This analysis is wrong if:

  • Immigration restrictions lead to measurable increases in domestic worker employment in restricted sectors
  • Companies do not increase offshoring in response to immigration restrictions
  • Startup formation rates remain stable or increase after immigration tightening
Sources
  1. 1.
    NFAP: Immigrant Founders of Billion-Dollar Companies

    55% of US billion-dollar startups have immigrant founder or co-founder

  2. 2.
    Brookings: Immigration and Innovation

    Immigrants file patents at 2x rate of native-born workers

  3. 3.
    NBER: The Effects of High-Skilled Immigration Policy

    H-1B restrictions lead to offshoring, not domestic hiring

Related
P014P018
Tags
immigrationbrain-draintalentoffshoringstartupsstem

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