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The Effect of the H-1B Visa Program on Innovation, Firms, Employment, and U.S. Workers

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dc.contributor.advisor Ball, Richard J. Bergen, Henry 2021-07-12T12:44:09Z 2021-07-12T12:44:09Z 2021
dc.description.abstract The H-1B visa, introduced in 1990 by the Immigration Act of 1990 for U.S. firms to sponsor foreign workers with at least a Bachelor's degree temporarily for a period of three years, paid at or above the prevailing wage. Proponents of the visa argue that the H-1B visa benefits the US by increasing innovation and productivity growth as well as maintaining U.S. firms' global competitiveness by way of access to the best human capital. Critics maintain that H-1B workers are substitutes for domestic workers and do not innovate, rather they displace US workers, are paid less than US workers, and suppress market wages. Through careful analysis of the academic literature, I find that innovative gains are only realized at best for small firms in the IT industry. H-1Bs appear to increase productivity of U.S. firms, and as a result improvements in firm profitability are observed. Crowding-out of comparable U.S. workers is significant in most studies, although in several natural experiments slight crowding-in is observed. Lower high-skilled U.S. worker wages are observed in all cases. This suggests that H-1B workers and U.S. citizen peers are substitutes rather than complements. Low-skilled worker wages and employment are observed to increase with H-1B workers, so these two groups are complements. Overall, the economic benefits of the H-1B program accrue mainly to U.S. consumers, firms, and low-skilled workers, while high-skilled U.S. native workers experience significant negative economic outcomes, although evidence of crowding-out is inconclusive.
dc.description.sponsorship Haverford College. Department of Economics
dc.language.iso eng
dc.subject.lcsh United States -- Emigration and immigration -- Economic aspects
dc.subject.lcsh Foreign workers -- Economic aspects -- United States
dc.subject.lcsh Visas -- Economic aspects -- United States
dc.title The Effect of the H-1B Visa Program on Innovation, Firms, Employment, and U.S. Workers
dc.type Thesis
dc.rights.access Tri-College users only

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