The United States is the leading country in the world in scientific research and in applying the results of research and development (R&D) to practical economic problems. The U.S. relies on high-tech industries and intellectual property for its competitive edge in the global economy. The country exports high-tech goods and intellectual property while importing low-tech goods such as plastic children?s toys and sneakers from low-wage countries, and importing medium-tech consumer and other items such as washing machines and cars from advanced European economies, Japan, and Canada.

In the lingo of economists, the U.S. has a comparative advantage in science and technology just as Columbia or Brazil have comparative advantages in producing coffee, the Caribbean has a comparative advantage in sun and beaches, and the Middle East has a comparative advantage in oil. But unlike the comparative advantages associated with geography, a comparative advantage in science and technology is self-made. It requires public funding for R&D and science and engineering education, and policies that create and maintain a healthy job market for scientists and engineers.

What shortage of scientists?

At this writing the job market for scientists and engineers is not healthy and it risks getting less healthy. Many in the science establishment complain about shortages of scientists and engineers and call for investments in improved schooling at the K-12 level to create a larger flow of young persons into science and engineering careers. This misreads the problem and possible solutions.

There is no shortage of scientists and engineers in the U.S. Between 1990 and 2003 the number of scientists and engineers increased more rapidly than the rest of the workforce while earnings and career opportunities in these fields fell short of those in other education-intensive fields. Unable to gain independent research grants, young scientists spend years as low-paid postdocs before gaining ?real jobs? in academe, industry, or government. Many bright young Americans choose to invest in other occupations. Do you want to be a 35-year-old postdoc earning $40,000 in someone else?s lab, or an MBA earning $150,000 working in a major business directing others?

Still, the U.S. has been able to increase the number of scientists and engineers to meet growing demands. There is no shortage because the country has attracted large numbers of the best and brightest students, researchers, and science and engineering workers from foreign countries. According to the 2000 Census of Population, 38% of Ph.D.s working in science and engineering occupations were foreign-born--a massive rise over the 24% foreign-born figure for 1990. In 2000, 52% of employed Ph.D. scientists and engineers in the age bracket 24 to 45 were foreign-born. Among postdocs, the foreign-born proportions is around 60%. The pattern of rapid influx of immigrants into science and engineering is also found at the master?s and bachelor?s level, albeit from lower bases.

Until this year the flow of students from overseas seemed unending. Were it not for the flow of foreign-born researchers, U.S. science and engineering would be in crisis.

The shortfall of young Americans in science and engineering does not reflect the state of U.S. education or the innate intelligence or work ethic of young Americans. Each year our students do well in the Math and Physics Olympiads. Thousands more American students are capable of pursuing careers in science and engineering. Suggestions to ramp up K-12 education to create a scientifically literate and able group of students--which invariably takes 1 to 2 decades--or to try to convince U.S. undergraduates that science and engineering is for them without improving their career prospects will not succeed. Americans are not enrolling in science and engineering in increasing numbers because the job market for scientists and engineers does not offer opportunities as attractive as competing areas. Low-paid postdoc, or lucrative MBA, MD, or law degree?

The real problem in the science and engineering job market is in the balance between domestic and international supplies of workers and students. The influx of foreign-born students and immigrant scientists and engineers is both a blessing and a problem. It is a blessing because it brings the best and brightest from around the world to our universities and labs and strengthens our comparative advantage in science and high-tech fields. Given the nature of the American position in the global economy, this is not a luxury; it is necessary for long-term U.S. economic well-being. It is a problem because, at the same time, the huge influx of foreign students and workers keeps wages and employment opportunities below what they would otherwise be. This discourages U.S. citizens from investing in science and engineering careers, and thereby increases our dependence on the foreign-born.

There are inherent risks to the U.S. economy from relying extensively on flows from other countries for the key input into our economic success. Countries like China that currently supply a large proportion of students and workers to our science and engineering endeavor might, in the future, discourage students from coming to the U.S. As the Chinese and Indian economies improve, the attractiveness of the U.S. as a place to study and work will decline. Reacting to the flow of European scientists and engineers to the U.S., the European Union has already begun improving its offerings to top researchers.

Recent headlines highlight the risks. This spring the Council of Graduate Schools reported a 32% drop in the number of foreign students applying to the U.S. for higher education. Officials at Wisconsin, Southern California, Minnesota, Princeton, Texas A&M, among other major universities have been stunned and troubled by the decline in applications. Some, such as Chancellor John Wiley of Wisconsin, have focused on the danger to the supply of scientists and engineers from reduced flows of international students. Others, such as former CIA head and president of Texas A&M Robert Gates, have focused on the implications of denying entry to foreign students on the war on terrorism and our national security. My concern is with the risk to our economic health--to trade, jobs, and living standards.

To some extent, the drop in overseas applications to U.S. universities reflects U.S. visa policies, which the State Department can hopefully correct. The message from visa officials should be that we want foreign-born students and scientists and engineers to come to the U.S. We want them to choose our country as the best place to do their studies and work. The message should also be that we want them to stay and join us as citizens. We want them not only because Americans love the cultural diversity of our melting pot and appreciate hard-working immigrants more than almost any other peoples; we want them also because they are necessary for the health of our economy, for our comparative advantage in the global economy, and for the long-term ability of our country to provide rising living standards for our citizens, native born as well as current and future immigrants.

Greater investment needed in young scientists

At the same time, we have to find ways to increase the attractiveness of science and engineering careers to U.S. citizens. This is a hard problem because it means improving pay and career opportunities for independent work by younger scientists and engineers, potentially at the expense of older PIs and of the relatively inexpensive research endeavor that the flow of foreign born researchers has permitted. With a given R&D budget, agencies must devote larger shares to investing in younger scientists and engineers. The Administration and Congress must recognize (as many firms already do) that slowdowns in the growth of R&D budgets are penny wise and pound foolish.

The country does not have many levers to improve the career attractiveness of science and engineering for Americans while simultaneously encouraging foreign-born students and immigrants to come to the U.S. There is, however, one area in which policy can make career prospects more attractive to Americans. This is through the number and size of stipends available to U.S. citizens from the National Science Foundation, the National Institutes of Health, and other government agencies. Since these awards are limited to U.S. citizens (just as scholarships and stipends given by foreign governments are almost always limited to their citizens), they are the natural tool for differentiating U.S. citizens from noncitizens.

What is needed to attract more young Americans into science and engineering are larger and more attractive fellowships and stipends and a major revamping of the career structure and timing of rewards in science and engineering. We need to make science and engineering more like athletics, where pay and career opportunities are frontloaded rather than backloaded in careers. The relation between senior PIs and postdocs and young researchers should be more akin to that between coaches and managers and young athletes than that between employer and employee. More credit and reward should go to the young researcher.

We all know the poem by Emma Lazarus, ?Give me your tired, your poor, your huddled masses yearning to be free,? at the foot of the Statue of Liberty. For our economic health (and for our national security as well), I would amend this: ?Give us your best students, your creative scientists and engineers, yearning to make great discoveries? and we will continue to be the locomotive economy on which all of the world can rely. But we must also deliver ample economic rewards and fulfilling careers to our own best and brightest if we are to maintain our position as the world?s science, technology, and economic powerhouse. Striking the right balance between domestic and foreign supplies is the science and engineering workforce problem of our time. Let?s get on to solving it by improving the job market for scientists and engineers.

Richard B. Freeman teaches economics at Harvard University and the London School of Economics. He is also faculty director of the Labor and Worklife Program at Harvard Law School and director of the Labor Studies Program at the National Bureau of Economic Research.