Foreign graduates not a source of cheap labor in the US finds study
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US organizations recruit foreign students not because they are a cheap source of labor yet because of a skills shortage. According to a new working paper by the Center for Growth and Opportunity – a university-based academic research center.
The paper, by Omid Bagheri, Assistant Professor of Economics at the Kent State University at Salem (Oregon). Depends on information on college graduates
“Our results show that foreign workers are not a cheap source of labor. After controlling for socio-economic and demographic characteristics, by utilizing the pooled information. We find that highly educated immigrants who hold temporary work visas have had about 29.5% wage premium over US-born natives,” Bagheri wrote.
One of the likely reasons for the difference in wages is that highly educated professionals who have migrated to the United States are being paid a premium. Because the US labor market demands more of these workers than there is a supply for, pointing to a lack of skilled talent locally.
The H-1B visa program, among the greatest temporary work visa programs in the nation. Is the most commonly used route to bridge this skills gap by US organizations as well as Indian services companies.
Foreign students are not a source of cheap labor
Indian nationals represent more than 66% of the 85,000 new H1-B visas issued yearly. The program has frequently been criticized because it permits US organizations. To hire cheap foreign labor while US nationals don’t get enough jobs.
The number of H-1B visas gave every year has been rising, pointing to a demand-supply mismatch in the market. According to the United States Citizenship and Immigration Services (USCIS), on average, about 240,000 H-1B visas each year, were given between 2007 and 2017, including renewals.
Generally, the study suggests that the US economy needs a greater number of skilled workers than is currently available. This is a common finding in research on skilled immigration. US organizations are not only willing but already pay significant premiums to hire foreign workers with the skills that they need,” Bagheri said.
[US seeks public comments to determine wage levels under H-1B visas]
The study further found that the wage premium was lower for immigrants from certain nations like India and Iran. However, didn’t differ significantly by gender.
Bagheri proposes that US policymakers consider extending the current visa programs. And creating new ones to make it simpler for organizations to recruit foreign workers.
The nation could adopt from the merit-based programs in nations like Australia and Canada, he recommends.
“Second, we should encourage more native workers to pursue training and education in fields with a high wage premium. These changes would make US organizations more serious. By giving them access to top talent across the nation and increasing the pool of homegrown talent,” said Bagheri in the paper.
