Emigration from Israel, 1980-2010: Has the “Brain Drain” Intensified?

The paper focuses on changes in the selectivity of immigrants from Israel to the US over time.  Rising inequality (a proxy for returns to skills) in the US since the 1980s imply that the incentives for high skilled Israelis to immigrate to the US have increased over time, thereby intensifying the brain drain from Israel. To test this brain drain hypothesis, we analyze both Israeli and U.S data. The Israeli data, Labor Force Surveys from 1980-2010 tell us the characteristics of the population from which the immigrants were drawn. The U.S. data, 5% PUMS Census data for 1980-2000 and 1% ACS data for 2006-2010, are informative of the size and characteristics of recent immigrants from Israel to the U.S. during this period.  We focus on “recent” immigrants, namely, those arriving to the U.S. in the 5-year period preceding the census year (namely 1976-80, 1986-90, 1996-2000, and 2006-2010). The education and income of recent immigrants are indicative of the skills with which they have arrived in the U.S., before any meaningful economic assimilation has occurred.  Comparing the gaps between the educational levels of native Israelis in Israel and their counterparts who immigrated to the U.S., we find no major changes in the educational selectivity of Israeli immigrants over time.  By contrast, cross sectional quintile regressions estimating the incomes of recent cohorts of Israeli immigrants in the US provide some support for the brain drain hypothesis, but only until 2000: they show that the income advantage of recent immigrants over demographically comparable US natives has increased over time among those at the top 25% of the distribution, but not among immigrants located at lower percentiles of the income distribution.  This suggests that the unobserved, productivity-enhancing traits of the most skilled Israeli immigrants to the US have increased between 1980 and 2000.