The H-1B visa program has led to lower wages and employment for American tech workers, according to a new paper published under the auspices of the National Bureau of Economic Research. As reported by John Simons in The Wall Street Journal, the authors “…found that, while the 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.”
The paper, by John Bound and Nicolas Morales of the University of Michigan and Gaurav Khanna of the University of California, San Diego, covers the period from 1994 to 2001, “…the longest stretch of time when employers claimed all available H-1B visas,” as Simons quotes Bound as saying.
Simons quotes Giovanni Peri, an economics professor at the University of California, Davis, as calling the new research is noteworthy, but Peri would like to see more studies on the issue.
Peri and coauthor Gianmarco I. P. Ottaviano of the University Bologna wrote a paper in 2006 that examined immigration from 1970 to 2005. They studied immigration at all levels—not just by H1-B visa holders. They found a net increase in average wages for U.S.-born natives as a function of immigration. In a separate study, they found that more educated U.S. natives benefit most from immigration; U.S. natives without a high school diploma suffer a small wage decline. In addition, they report that immigration increases housing prices, and as natives have higher home-ownership rates than immigrants, the result is a transfer of wealth from immigrants to natives.
With regard to the new study, Simons at The Wall Street Journal quotes Jennifer Hunt, former chief economist at the U.S. Department of Labor under President Obama, as saying she would have preferred that Bound and his co-authors focus on more recent time periods. But she added that the paper is “the best work we have by a long way” in quantifying the “negative” effects of H-1B immigration.
The paper, “Understanding the Economic Impact of the H-1B Program on the U.S.,” can be downloaded for $5. Peri’s paper is free here.
