A new National Bureau of Economic Research
working paper looks
at how H-1B visa workers affected the wages of college-educated and
non-college-educated native workers in 219 American cities between
1990 and 2010. The economists find that H-1B workers are good for
economic growth and increasing wages. The researchers find that
…
…a rise in the growth of foreign STEM by one percentage point
of total employment increases growth in the wages of native college
educated workers by a statistically significant 7-8 percentage
points.The same change had a smaller but usually statistically
significant effect on the wages of native non-college educated
workers equal to 3-4 percentage points. No statistically
significant effects were found for the growth of native employment.
We also find that an increase in foreign STEM growth had a
significantly positive impact on growth in housing costs for
college educated workers. The increased cost in non-tradable
services (housing) absorbed about half of the increase in the
purchasing power of college educated wages.Finally, we use a simple model of city-level production and the
estimated wage and employment effects to calculate the effect of
STEM on total factor productivity (TFP) and skill-biased
productivity (SBP). We find that STEM workers have positive effects
on both TFP and SBP. Aggregating at the national level, inflows of
foreign STEM workers may explain between 30 and 50% of the
aggregate productivity growth and 4 to 8% of the skill-bias growth
that took place in the U.S. between 1990 and 2010.
BTW, total factor productivity meaures the efficiency all inputs
to a production process. Increases in TFP result usually from
technological innovations or improvements.
It’s just stupid to send away talented people who want to work
here. Clearly whoever said that every foreign student who earned a
scientific or technical degree at an American University should
find a
green card stapled to his or her diploma was right.
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