Are College Graduate Immigrants on Work Visa Cheaper Than Natives?

The use of H-1B and other work visas to hire foreign professionals in the United States has been controversial and has caused policy debates. Using the 2010, 2013, 2015, and 2017 cycles of the National Survey of College Graduates (NSCG), this study examines the wage gap between college graduate immigrants working in the U.S. on a work visa and their native counterparts. We find that over the course of 2010-2017, temporary work visa holders, on average, have a 0.258 log point (approximately 25.8%) wage premium over natives. This premium, however, increases from 15.6% in 2010 to 31.9% in 2017. Although the differences between the two groups in socioeconomic and demographic factors explain the majority of this wage gap, due to existence of some unobservable characteristics, some portion of the gap remains unexplained. According to our results, this wage premium is larger for immigrants born in English-speaking countries and those who obtained their highest degrees from a non-U.S. university or college. It is also larger among bachelor’s degree holders, and among those having a degree or job in computer related or engineering fields. However, we find no such a wage gap in certain occupations/fields or among doctoral and professional degree holders. Our results can therefore lead to important policy implications, such as changing skilled worker immigration rules.