H-1B visa lowers wages of American workers, says new research paper

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NEW YORK: The influx of skilled foreign workers on H-1B visa has historically led to lower wages and employment for American tech workers, according to a new research paper.

Economists from the University of Michigan and the University of California, San Diego, analyzed employment, wages and other factors over an eight-year period ending in 2001. They found that, while the H-1B visa program bolstered the U.S. economy and corporate profits, tech-industry wages would have been as much as 5.1% higher in the absence of the H-1B visa program and employment of U.S. workers in the field would have been as much as 10.8% higher in 2001, reported The Wall Street Journal.

The paper, “Understanding the Economic Impact of the H-1B Program on the U.S.,” written with co-authors Nicolas Morales of the University of Michigan and Gaurav Khanna of the University of California, San Diego, was published in February by the nonpartisan National Bureau of Economic Research.

Giovanni Peri, an economics professor at the University of California, Davis, said the new research is noteworthy, but would like to see more studies on the issue. Peri’s own research on immigration of highly skilled workers—not solely H-1B holders—found overall positive effects on wages across a variety of job sectors, noted the Journal.

John Bound, a professor at the University of Michigan and one of the authors of the new study, said he and his fellow researchers focused their paper on the 1994 to 2001 period because it was the longest stretch of time when employers claimed all available H-1B visas. However, in an earlier paper, they found that a similar model did “a good job capturing the movement of wages and employment in the 2001 to 2011 period.”

U.S. employers can sponsor up to 85,000 H-1B holders a year, including 20,000 for students on F-1 visa who graduate with a master’s degree or higher from an US institution.

Jennifer Hunt, former chief economist at the U.S. Department of Labor under President Obama, said she’s noticed an increasingly politicized response to research on immigration and wage inequality. She said she would have preferred that Bound and his co-authors focus on more recent time periods, but added that the paper is “the best work we have by a long way” in quantifying the “negative” effects of high-skilled immigration.