WASHINGTON, DC: H-1B visas have insignificant impact on new patents in the short term and also results in lower wages, according to a new study authored by economists from the University of Notre Dame in Indiana, the University of California, Berkeley, and the Office of Tax Analysis at the U.S. Department of the Treasury.
The authors — Kirk Doran, Alexander Gelber, and Adam Isen — used data from U.S. Citizenship and Immigration Services, the Internal Revenue Service, and the U.S. Patent and Trademark Office to track outcomes for firms that won the lottery and, thus, received new H-1B workers, reported Science Magazine.
“Our paper is the first we know to isolate the effect of an additional H-1B visa given to a particular firm on outcomes at that firm,” they write in the paper. “We demonstrate that H-1Bs given to a firm on average do not raise the firm’s patenting and/or other employment, contrary to firms’ frequent claims. Overall our results are more consistent with the second [i.e., the critics’] narrative, in which H-1Bs replace other workers to some extent, are paid less than alternative workers, and increase the firm’s profits (despite little, if any, effect on firm patenting).”
The study’s findings are contrary to the widely accepted notion that foreign workers create American jobs.
“Our results are consistent with the possibility that H-1B and non-H-1B workers are perfect substitutes. This is notable in light of frequent claims that H-1Bs have unique skills that cannot easily be obtained elsewhere,” they stated.