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Immigration and the tech industry: As a labour shortage remedy, for innovation, or for cost savings?

Author

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  • Norman Matloff

    (Department of Computer Science, University of California-Davis, 1 Shields Ave, 3053 Kemper, Davis, CA 95616, USA)

Abstract

The two main reasons cited by the U.S. tech industry for hiring foreign workers-remedying labour shortages and hiring “the best and the brightest”-are investigated, using data on wages, patents, and R&D work, as well as previous research and industry statements. The analysis shows that the claims of shortage and outstanding talent are not supported by the data, even after excluding the Indian IT service firms. In-stead, it is shown that the primary goals of employers in hiring foreign workers are to reduce labour costs and to obtain “indentured” employees. Current immigration policy is causing an ‘Internal Brain Drain’ in STEM.

Suggested Citation

  • Norman Matloff, 2013. "Immigration and the tech industry: As a labour shortage remedy, for innovation, or for cost savings?," Migration Letters, Migration Letters, vol. 10(2), pages 210-227, May.
    • Handle: RePEc:mig:journl:v:10:y:2013:i:2:p:210-227
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    References listed on IDEAS

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    1. Jennifer Hunt, 2011. "Which Immigrants Are Most Innovative and Entrepreneurial? Distinctions by Entry Visa," Journal of Labor Economics, University of Chicago Press, vol. 29(3), pages 417-457.
    2. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2010. "How Much Does Immigration Boost Innovation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 31-56, April.
    3. Sunil Mithas & Henry C. Lucas, Jr., 2010. "Are Foreign IT Workers Cheaper? U.S. Visa Policies and Compensation of Information Technology Professionals," Management Science, INFORMS, vol. 56(5), pages 745-765, May.
    4. Sari Pekkala Kerr & William R. Kerr, 2013. "Immigration and Employer Transitions for STEM Workers," American Economic Review, American Economic Association, vol. 103(3), pages 193-197, May.
    5. William R. Kerr & William F. Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 473-508, July.
    6. Sankar Mukhopadhyay & David Oxborrow, 2012. "The Value of an Employment-Based Green Card," Demography, Springer;Population Association of America (PAA), vol. 49(1), pages 219-237, February.
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    Citations

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    Cited by:

    1. Chad Sparber, 2015. "The Value of H-1B Status in Times of Scarcity," RF Berlin - CReAM Discussion Paper Series 1510, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Briggs Depew & Peter Norlander & Todd A. Sørensen, 2017. "Inter-firm mobility and return migration patterns of skilled guest workers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 681-721, April.
    3. Jennifer Hunt & Bin Xie, 2019. "How Restricted is the Job Mobility of Skilled Temporary Work Visa Holders?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(1), pages 41-64, January.
    4. Stojcic, Nebojsa & Bezic, Heri & Galovic, Tomislav, 2019. "Do we need more immigration? Socio-cultural diversity and export sophistication in EU 28 countries," MPRA Paper 108718, University Library of Munich, Germany.
    5. Sparber, Chad, 2019. "Substitution between groups of highly-educated, foreign-born, H-1B workers," Labour Economics, Elsevier, vol. 61(C).
    6. Piriya Pholphirul & Pungpond Rukumnuaykit, 2017. "Does Immigration always Promote Innovation? Evidence from Thai Manufacturers," Journal of International Migration and Integration, Springer, vol. 18(1), pages 291-318, February.
    7. Chad Sparber, 2015. "Building a Better H-1B Program," RF Berlin - CReAM Discussion Paper Series 1513, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).

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    More about this item

    Keywords

    H-1B; green card; prevailing wage; best and brightest;
    All these keywords.

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