Immigrant Innovators: Job Stealers or Job Creators?

The H-1B visa program, which enables US employers to hire highly skilled foreign workers for three years, is "a lightning rod for a very heated debate," says Harvard Business School professor William Kerr. His latest research addresses the question of whether the program is good for innovation, and whether it impacts jobs for Americans. Key concepts include:
  • An uptick in the number of H-1B visas given to Indian and Chinese engineers correlates with an increase in the number of US patents.
  • The H-1B program seems to have no overall effect on the number of jobs held by American-born scientists and engineers, nor does it affect the number of patents from inventors who have Anglo-Saxon names.
by Carmen Nobel

The House Subcommittee on Immigration Policy and Enforcement met recently to hash out concerns related to the H-1B program, one of the most controversial of foreign visa topics in the United States. At issue was a stubborn question that politicians, corporations, academics, and lobbyists have been arguing since the creation of the program more than 20 years ago: Is the program helpful or hurtful to American workers?

“What's not debated is that immigrants are extremely important to innovation"

The program enables US employers to hire highly skilled, specialized foreign workers for three years, with the opportunity to apply for an additional three-year extension. During this period, workers can request green cards and secure permanent residency status if they desire. The current annual cap for the "regular" H1-B category is 65,000 visas. (There is a separate category, capped at 20,000, specifically for beneficiaries who have received advanced degrees in the United States.)

"It's a lightning rod for a very heated debate," says William Kerr, a professor at Harvard Business School who studies how immigration affects innovation in the United States. "What's not debated is that immigrants are extremely important to innovation. What is debated is whether that comes at the expense of native Americans."

Kerr's recent research indicates that while the program is good for innovation, it has limited overall effect on non-immigrant workers.

The government does not limit H-1B visas to any particular industry—both software engineers and fashion models are considered "specialized"—but 60 percent of the visas go to workers who specialize in science, engineering, and high-tech occupations. Top recipients of H-1B visas include major US-based technology companies Microsoft, Oracle, and IBM. But the program also has granted thousands of visas to India-based technology services companies that have US entities, including Infosys, Wipro, and Tata Consultancy Services.

As with any controversial topic, both program proponents and opponents are prone to hyperbole.

"You have some very prominent high-tech firms that say every immigrant creates jobs, claiming figures as high as six new American jobs for every immigrant hired," Kerr says. "On the opposite side you have people who are fiercely opposed to the program, saying that every immigrant you let in results in an American job lost. The debate has gotten to the point where neither side is willing to cede ground."

The Supply Side Of Innovation

Kerr's desire for a systematic study of the H-1B program resulted in the paper The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Innovation, coauthored with William F. Lincoln of the University of Michigan. The researchers set out to quantify the impact of changes in annual H-1B admission levels from 1995 to 2008, when national caps fluctuated from a low of 65,000 workers a year to a high of 195,000.

(The research was especially challenging due to a tremendous lack of detailed data about H-1B applications, says Kerr. "It's an unfortunate event that as the H1-B issue has become more controversial, the amount of available data has shrunk.")

“The debate has gotten to the point where neither side is willing to cede ground”

To gauge the program's effect on job growth, Kerr and Lincoln analyzed Current Population Survey data on that time period. Not surprisingly, growth in the H-1B program directly correlated with an uptick in the number of immigrants working in science and engineering. More importantly, the research seemed to rule out the idea that the H-1B program was stealing jobs from born-and-bred Americans. But it also ruled out the opposing idea that the program created a huge number of jobs for Americans.

"We do not find any substantive effect on native scientists and engineers across a range of labor market outcomes like employment levels, mean wages, and unemployment rates," the paper states.

The researchers studied not only the program's effect on American jobs, but also its effect on innovation in general.

"The bigger goal was to try to understand the impact of science and engineering immigration on US innovation and employment and the like," Kerr says.

Patent Effects

To determine whether an increase in H-1B visas led to an increase in innovation, the researchers looked at data from the United States Patent and Trademark Office, examining patent applications and grants through May 2009. While patent records do not contain definitive information about inventors' immigration status or ethnicities, they do contain the inventors' names. By utilizing name-matching software, the researchers could infer the ethnicity of inventors at any given firm. An inventor named Chang was likely Chinese, for example.

Kerr acknowledges the problems inherent in the methodology.

"We didn't know if a person was a first-generation immigrant; he or she could be second-generation," he says. "Then you get into things such as name changes due to marriage or, more problematic, names like Lee, which could be Chinese but also has a 'Robert E. Lee' context to it."

But common sense provided enough information to detect definite patterns. As the paper states, "Inventors with the last names Gupta or Desai are more likely to be Indian than they are to be Anglo-Saxon or Vietnamese."

"You can open up a black box on a lot of these issues," Kerr says. "Following the patterns, you can start to say, what's the ethnic composition of Harvard's inventors, IBM's inventors, or Cisco's inventors? This technique allows a much deeper analysis, especially within firms and institutions, than otherwise possible."

The researchers found that the number of inventions by foreign ethnicities, Indians and Chinese in particular, was closely tied to H-1B admission levels. A 10 percent increase in the H-1B population correlated with a 4 percent to 5 percent growth in Indian ethnic invention in dependent cities compared to their less dependent peers. Overall, increasing H-1B admissions by 10 percent resulted in a 1 percent increase of total patented inventions.

However, the H-1B program seemingly had no sweeping effect on the number of patents sporting Anglo-Saxon names, indicating that immigrants were not stealing thunder from inventors whose families came to America on the Mayflower.

"So we come out with this overall conclusion that says that US innovation increases with letting in more immigrant scientists and engineers, primarily due to the contributions of these immigrant scientists and engineers," Kerr says. "But we don't see much impact, positive or negative, on American Anglo-Saxon workers in the short-to-medium time frames that we can evaluate with the H-1B program's fluctuations. We know there are plenty of individual stories about people who have lost their jobs due to the H-1B program. This paper doesn't say that this never happens nor does it downplay the consequences of displacement. But in other situations jobs are created. This paper is about the overall treatment of the economy from the immigration side."

Is The Program Fair?

Kerr is studying several areas in which the H-1B program may be unfair both to immigrants and to US workers.

Immigrants who come to the country on H-1B visas are very dependent upon the firms that hire them, a situation that critics contend leads some companies to view the program as a source of cheap labor. Kerr is testing this theory by comparing wage levels of immigrants who have received green cards/permanent worker status with those who are on temporary visas, such as H-1Bs.

More obviously unfair is the green card application process itself. Applicants from larger countries such as China and India have to wait much longer than applicants from smaller ones to secure freedoms that come with permanent worker status. "We have a policy that we set aside the same number of employment-based spots per country, regardless of its size," Kerr explains. "So if you happen to be here from Belize, then your green card application gets processed very quickly, but the estimated wait time for India or China is six years or longer."

"This notion of the backlog for the green card has got to be resolved," he says.

Separately, Kerr is researching whether the H-1B program induces age discrimination. While his previous research shows no apparent overall effect on American workers, the current research will home in on whether the program inhibits job growth and career advancement among middle-aged American workers. By studying the ages of workers in firms with H1-B programs, Kerr hopes to learn whether the average age at a firm decreases as H-1B admission levels increase.

"Sophisticated critics of the H1-B program have argued that high-tech firms use the program as a means to keep their workers young and costs lower," he says. "There's no question that when you look across industries, the ones that are very immigration-dependent also have an average younger age than other industries."

About the Author

Carmen Nobel is the senior editor of Harvard Business School Working Knowledge.
    • Anonymous
    In Computer-related occupations, degrees conferred to citizens and permanent residents (757,762) exceeded employment growth (602,180) for 2004-2009 period. H-1B initial employment approvals (315,429) in the occupations was 52% of the employment growth.

    Not sure if the Kerr study takes new graduates into effect. 50% or L-1 visas are likely to be in Computer-related occupations bringing the total to 69% of employment growth awarded to temporary workers. It's likely the he combination of the two groups of new entrants are displacing older (mortgage holders) professionals.
    • Anonymous
    Point to be noted: "We have a policy that we set aside the same number of employment-based spots per country, regardless of its size," Kerr explains. "So if you happen to be here from Belize, then your green card application gets processed very quickly, but the estimated wait time for India or China is six years or longer."

    I have been waiting for my Green Card more than 6 years, and although there is no official estimate of when I might get my Green Card, based on my extrapolation it is probably another 6 years or so. I have been earning well into 6 figures (I did not deprive an American citizen a job by undercutting/working for low wages) and have paid my fair share of taxes as well. Why this wait?
    • jake_leone
    Would like to see the separation between Software Patents and Other Patents. Software Patents (relatively new) were originally considered invalid, as software is a form of "Communication". And communication is not Patentable.

    Also, H-1b, B-1, and L-1 enables offshoring of jobs. Why make it easier for companies to offshore whole departments. It's clear the money is not coming back to the U.S. economy (save in terms of debt), please elaborate on how H-1b (and the other Visa programs) cannot be better administered to prevent their usage as job destroyers in the United States.

    When companies such an InfoSys have U.S. engineering workforces that are 90+% from India. Why should the U.S. even grant them any Visas. Clearly they are not even trying to hiring U.S. citizens for engineering jobs.

    Why should we tolerate ethnic discrimination in the country? Is this not destructive, when the best candidates are not allowed to compete for jobs in the United States?
    • Byron T
    "the H-1B program, one of the most controversial of foreign visa topics" the real controversy is the fact most can not afford college. If they do get a loan, they have a hard time paying it back due to the fact they can not get a job that pays enough to live and pay back the loan, especially when competing with immigrants who paid a fraction of the cost for their education and will work for lower wages.

    Make education affordable, watch Americans increase in innovation.
    • Donna Conroy
    • Director, Bright Future Jobs
    This is silly argument. It is perfectly legal to never consider Americans for US job openings.

    H1-b law allows companies to conduct segregated recruiting and hiring for their US job openings, and allows companies to displace Americans with foreign citizens. Corporate discrimination is so wide-spread we have H1-b only want ads and even OPT (foreign student training visa) Only want ads.

    You can see these ads on our site and watch me scroll thru ads on Dan Rather Reports.

    As an opponent of H1-b corporate discrimination, I take exception to your characterization that we state it is JOB LOSS. We never say that; in fact, there is a lively job market in the US, but right in the corporation's ad the meaning is clear, "no Americans need apply."

    As an American patriot, I have lobbied Congress to restore our freedom to compete for job openings in our own country.

    Simply put, we will never discriminate our way to job creation.
    • Anonymous
    H1 B can only create a business by aligning with an american. For each H1 B enterpreneur there will be a amrican citizen. and the law state that' On h1 B visa one can start a company by cannot work directly for it' he can take profits but cannot be on company's payrole'. This is a stupid law which prevents H1 B visa holder from creating companies.
    • Paul Bain
    • Unemployed for 34 out of the last 38 months
    The USA has a 22% unemployment rate, and these dolts continue to insist that there is a labor shortage in the IT field in the USA. Furthermore, none of these pro-immigration Republicans are able to see any correlation between the sky-high unemployment rate and the essentially unrestricted immigration of the last 20 years. And these same Republicans wonder why conservatives do not trust them. Gawd, are they stupid!!

    -- Paul D. Bain
    • Anonymous
    Nonsense. The H-1b corporate visa law has been wiping out American jobs for over a decade and offshoring USA jobs.

    Corporations love H-1b law because it it allows them to:

    ? Exclusively hire offshore for US job openings - without ever giving Americans a chance to apply.
    ? Force Americans to train their foreign replacements.
    ? Move their foreign employees into US job openings in order to offshore our jobs

    Like cancer, the secret H-1b law that legalizes discrimination against American citizens, has been growing undetected. Until now.

    It is high time that Congress serve We the People of the United States of America. Not Microsoft, Infosys, or Cognizant.

    Senators Schumer, Lofgren, Cornyn. - Tear Down this H-1b Law:

    "H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of the foreign worker," according to the Department of Labor's Strategic Plan, Fiscal Years 2006-2011.

    Look beyond corporate lobbyists with deep pockets and an agenda. There is an abundance of highly skilled, educated Americans, professionals, and recent graduates, seeking jobs right here, right now. We have paid our dues and our taxes. We are ready, willing, able to make a difference and proud to contribute to our country's future.

    Congress must rewrite discriminatory H-1b law and get Americans back to work. Keep the jobs of the future at home - zero taxpayer dollars, not a dime added to the national debt. One signature is all it takes.

    The USA cannot compete as a country until US citizens can compete for job openings in our own country.
    • jgo
    • cybernetic praxeologist
    H-1B visas are NOT restricted to the "highly-skilled". There is no requirement that the recipient have even average skills. According to USCIS hundreds have been approved who lacked the equivalent of a US high school diploma, and thousands who lacked the equivalent of a US bachelor's degree. Further, an examination of applications shows that they are not required to have above-average abilities. Nor are they paid above the average, as economists would expect for people who you claim are "highly-skilled", but, as Vandrevala, VP of Tata confessed, are paid 25% to 35% below US local market compensation, while other investigators, using US government data, have pegged the anti-premium for these cheap, pliant guest-workers with flexible ethics, at 12% to 15%.

    Over 100K H-1B visas have been issued in each of the last 10 fiscal years. The vastly excessive numbers of student F), exchange (J), and guest-work (E, H, L) visas issued over each of the last 50 years is the source of most abuse.

    MSFT, Oracle, IBM, FB, LinkedIn, Grouply, Google... serve as examples of the decline in quality and professional ethics driven by the ready supply of guest-workers.

    A 10% increase in the H-1B population correlated with a 4% to 5% growth in Indian ethnic names appearing among the applicants on patent applications, just as you'd expect if 40% - 55% of student and guest-work visa grantees were from India, displacing those of us from German, Middle Eastern, Japanese, Scottish, Norman families.

    I notice that these KLowns are big on unfounded assertions and short on precise descriptions of their data sources and methodologies. The fact remains that a lot of bright, creative, experienced, knowledgeable, industrous US citizen STEM workers who were actively recruited before H-1B was hatched can't get the time of day from recruiters today, and large numbers of US citizen STEM workers -- both new grads and old -- have been pushed into survival jobs in other fields.
    • Anonymous
    I was a H1B holder with a Masters and Phd from one of your coveted Universities where i paid more fees than the normal student.Then i pay all the taxes applicable to me and also pay extra for being different.One fine day my employer asks me to leave as i on H1B and cannot stay in your country anymore.Please understand there is discrimination on the other side too.These Anti H1B speaker do not understand that most of the S/W jobs are now advertised clearly stating "No H1Bs".Most of the Hitech S/W jobs at companies like Accenture,Deloitte any thing and everything related to Federal,enery etc are not open for H1B holders. Hiring in the US wont stop or reduce my H1Bs bu are done by the business practises of the firms.
    • JGN
    • INT
    Best jobs to the most skilled, it's as simple as ABC.

    Regardless of your nationality or where you are applying for a position, jobs should be allocated to those with the best skill set to do the role.

    H1B are granted because the US labour market is weak. Improve education, improve general skill training and field specific training and the American labour pool becomes more attractive and there will less of a need for the H1B scheme.

    This is a basic assessment of the situation but the above is over complicated.
    • Anonymous
    This article seems to ignore the problem we are having trying to get people in this country to major in the Sciences and Technology in colleges and universities. IEEE has been concerned about this issue for some time.
    • Anonymous
    I implore everyone to look at the situation from the other side and understand the issues. I have applied for a green card and have been waiting for 7 years and counting. I have worked with the same company for the same time and the expectation is I cannot change my role. My question to any one here who is against H-1B is ,would you be willing to work in the same job for 8 years with no expectation to move up in job?. Let me also ask you this. Today more American software and hardware is sold outside U.S. How do you think this came about?. Did you know that the folks who are here on H-1B pay social security and taxes to the govt. with no expectation that when they get old they will be taken care as they have to return home?. Did you know that when we get our H-1B extensions we have to renew our driver's licence every single time?. Did you know that if we go to college here we pay out of state tuition fee which is 3 times
    the instate fee which helps the universities earn revenue?. Did you know that folks who come into the country have to travel by air which is revenue for the U.S. Commercial carriers.

    While I put these things of interest, I'm no way saying people are entitled to a Green card or a citizenship. Everyone works and should work their way thru. Would help if every one looks at the situation on the other side. My 2 Cents...
    • Anonymous
    I can say for sure that the category is also talent pool. US remains to be the leader by bringing in the talent. If this leadership quality is gone, India and China will grow even faster as ideas will be borned there at a much faster place. There are LOT of H1B's who wants to create jobs in US with their ventures and start their own company. Something to consider to boost the economy.

    If green card process becomes faster for India and China, that 65,000 people every year can add 200,000 Jobs as they came here for one reason - to make a difference and try something big.

    America still offers that dream. It gives a rookie the stage he/she needs to perform. The stage needs to be here and not in China and India. Let the performers come. Dont let the stage to go there.
    • Anonymous
    I'm a H1-B visa holder with a BS & MS degree from a US university. When I graduated in 2004 very few employers were looking to hire any students who required H1-B visa. This is what employers would do. They loved your resume. They would invite you to interviews and as soon as they found out you needed to be "sponsored" (as technical term goes) they would politely apologize and move on. Any private company remotely doing anything for the US government will never touch any one like me. Look at the skills shortage in the space, defence and regulatory industries. The only primary options for people in my high-tech positions are the Bay area companies or the Wall Street ones. And even there the competition is intense. It's fierce. If you've ever been to one of those interviews you'll know. These companies tend to discrimate less based on your visa status. Although this has been changing with all the new regulations.

    Moreover one thing very few people talk about is how the international students are keeping the US schools in the black. They charge international students anywhere from 2x to 5x more than US citizens. Who's that helping? It helps the professors, faculty and everyone in between. It helps the US economy. It helps create new jobs in and around these schools.

    Are some companies expoliting the visa narms? Absolutely. They need to found out and punished. Just because some comapanies are abusing the system doesn't make the entire system corrupt.
    • Anonymous
    Both sides are correct and neither of the arguments are wrong. I am an H1B from India and I agree that companies like Infosys, TCS etc shouldn't be just allowed by US to have Indian workforce at the levels of percentage they do have. That is NOT what H1B was designed for and that IS an abuse of the program.
    On the other side, why does America - with a 6 yr waiting period for employer sponsored immigration for an Indian -want me to go back to India after I have spent 6 years working here AFTER my 2 years of masters here? After I have trained (US citizen) graduates in the 3 different regions of US to be better software developers and designers? After I have paid higher taxes and social security than average american earner? After I have purchased a house here?

    20 years ago, even 10 years ago, this beautiful country had a leverage that it barely has any more. The cost-benefit analysis doesn't make sense for an Indian like I anymore. I will make more "real" money in India today with more good exposure, better growth, and my family around me.
    In case you are tempted to ask - So why the ** don't you go back dude? My answer is simple... something that these debates forget... and that is... that in 8 years... you fall in love with this country, its culture, its people. You WANT to make a difference... you WANT to start your own shop... you WANT this country to get back again the glory it has lost... and they it suddenly hits you that you need to shut up... coz you are just a tiny, little, measly, "immigrant". You are somebody who's "stolen" another american's job.
    • Sergio Perez
    • President, American Innovation Working Group
    In theory we should be able to have our cake and eat it too. I will like to bring highly skilled and talented people to fuel our innovation engine but we must have better safeguard. I see the abuse left and right as companies see this program as a way to get cheaper labor. The requirement should be that companies pay market rates plus a 10% surcharge that can be used to fund our worker retraining programs. We also need an effective way to enforce the rules and prosecute firms that violate them. It is amazing that companies were able to justify this type of visa over the last 2-3 years with our huge unemployment.
    • Anonymous
    Very questionable data and methods. Eg why is second generation Chinese an "immigrant"?

    How about somebody called Kerr or Goldberg? American, huh, or immigrant? :)

    Boy but still this has sparked some debates but note nobody talks about this research.

    Patents=innovation. Hahaha
    • BP
    • Banking/Financial
    I was recruiting for one of the open positions in Statistical Modeling. The job was posted and remained open for five months. Since there were many people from Chinese and Indian origin with visa (including me), an ideal candidate would have been a skilled Anglo-Saxon woman worker to induce some 'diversity'.

    However, a rough analysis of around 50 resumes were as follows:
    Chinese names - 25
    Indian names - 20
    Korean names - 2
    Other (East-European/Russian names) - 2
    Anglo-Saxon name (like 'John Smith') - 1 [wasn't qualified enough though]
    = = = = = =
    Foreign student with US Post-grad /PhD (and under-grad education in their home country) - 40
    Foreign workers with foreign degrees (all education in home country and work exp in US company) - 5
    US Degree (grad and post-grad both) - 5
    = = = = = =
    On a visa (H1B/L1/F1/OPT et al) - 45
    US Citizen/Green Card (irrespective of ethnic origin) - 5
    = = = = = =

    There is a 'real shortage' of Americans in STEM area. The choice for a corporate is restrict themselves to US citizens or to increase their search to tap 10x bigger talent pool.

    Needless to say, my idea of 'diversity' wasn't fulfilled.
    • Ram
    This is an extremely well written article. The topic of this article is often debated emotionally with very little objectivity. This article puts those to rest by providing quantifiable facts such as this "Overall, increasing H-1B admissions by 10 percent resulted in a 1 percent increase of total patented inventions."

    I can see why many in the US don't want the H1b program. I feel that they see the H1b employees as competition and as workers who take away their American jobs because they are willing to work for less. They also think that H1b workers are here to off-shore jobs from America. These fears are not always true. H1b visa in general are more expensive for US companies. If the intent is to ship jobs outside the US, then companies can do so using B1/B2, L1, L2 visa in a more cost-effective manner. Companies hire H1b (with an US degree, with MS, MBA, or PhD) to keep jobs in the US. Of course, there have been occations where companies used to bring in H1b visa holders to outsource jobs to India and elsewhere, but it hardly makes economical sense to do so today.

    Educated immigrants contribute to economy through patents, through education and by being consumers of products and services. They invariably contribute to the economy. They are even educated in their home country therefore they don't even utilize US tax payer's money to fund their education. But they do contribute equally to US Social Security programs and pay the same amount of federal and state tax. The US native population is aging as baby boomers are getting to retire. It is in US's best interest to attract young, educated immigrants to bridge the gap in these programs.

    The root of bad sentiment with native American workers is due to "Pay". If the system can ensure that H1b employees get the same pay as native Americans, then it is a fair game. The fittest should survive. For this to succeed, there should not be a "waiting period" for a US permanent residency. Putting skilled immigrants on a queue, making them wait for 6 - 8 years for a permanent residency is lunatic. Making a skilled immigrant wait for years to get become a permanent resident (not even a Citizen) will kill the incentive to innovate hence will not be productive in the overall job creation plan.

    The current policies neither benefits the immigrant worker nor the native American work force and it is rightly articulated in this article. The only ones who benefit from bad immigration policies are companies and institutions that game the system and impoverish the US economy.
    • Anonymous
    What percentage of STEM graduates born and bred in America contributed to patents? How often did patents becoming commercially viable? Patents are being used to file law suits and make out of court settlements to extract money from companies that violated the patent. With increased off shoring of manufacturing, are we even in a position to enforce patents in countries that don't have an effective judiciary? I wonder why we wait till we hit record unemployment before thinking about STEM, immigration, tariffs and protection. 195000 of "them" were welcome when "we" were doing great. Now that we have structural unemployment, let's drive away hard working, law abiding, tax paying immigrants and somehow, suddenly Edisons and Da Vincis will spring up in every American town with advanced STEM degrees. Make immigrants wait for 8 -10 years for their green cards while we debate about illegal immigration and somehow they wi
    ll be very eager to start companies and create more jobs after they are into their 40s raising kids...
    Isn't this myopic? I guess i only have questions...
    • Immigrant Citizen, Employer, 500 employees
    • Chief Product Officer
    As a business trying to provide customer value, you recognize that your competition is recruiting talent from a global pool; if you don't tap the global pool, you are at a disadvantage.

    Four possible outcomes:
    1. Recruit globally, but employ in the US, paying US wages and taxes.
    2. Recruit globally, but export the jobs if the talent is overseas.
    3. Restrict hiring to US talent, and risk losing in competition with overseas firms, potentially resulting in bankruptcy and loss of US jobs to overseas workers working for overseas firms.
    4. Erect not only immigration barriers, but trade barriers to protect US firms and US employees, resulting in fewer and more expensive products, lowered productivity growth, and a lowered standard of living.

    Of these, I find #1 the most attractive. But our regulations seem destined to steer behavior towards #2, #3, and #4.

    Within option #1, the tight pool of H1Bs encourages exploitation of H1B holders (paying them less because they are less mobile), which disadvantages the prospects of the more expensive non-immigrant workers.
    • Anonymous
    It is a mixed bag.

    1. During boom with unbelievable shortage of IT, tech people. Rules were TOO relaxed and many people with poor profile, no experience (lie on CV) admitted in USA abusing H1B program it was intended for.

    2. Companies over used back door visa likeL1

    3. More faults were IT consulting companies , they brought several semi or almost no skills people even without master degrees, but in shortage all got hired

    4. Corporation can't wait to finish projects and should be allowed to hire right talent but not to relax, abuse the system, which happened a lot. Its US companies who are either directly or via consulting companies making wrong profile to get visa any way.

    5. Every one in USA is or was an immigrant. Natives are only native Indians. Immigration, young , skilled talent would help not hurt, if done right

    6. It is US companies greed/profit to take job outside and not to pass the benefits to USA customers and make life more affordable here

    7. USA spends no money in training young engineers, schooling, college nothing , skilled workers and they start contributing in USA Social Security, medicare, add tremendous value in purchasing powers is a big plus for economy.

    8. Responsibility for pulling down the economy is again US corporate greed, tax evasions and wrong practices

    DON"T SELL GOOD STOCK, in bad times.

    Don't do surgery on hand for stomach ache .

    Unless those fundamentals are fixed by blindly going after immigration will sink it in another never ending recession. Right diagnosis and right treatment
    • Anonymous
    Don't pee on my leg and tell me that it's raining.

    This article and the "research" it references began with politics and the end purpose is political. When you start with those parameters and then look at the source you can pretty much determine the veracity of the information.

    The reason that the recovery has been jobless is because all of the new tech jobs are going overseas. If "American" companies hired American workers then the economy would be in much better shape.

    If Harvard and the government want to help the American people then lower or eliminate the immigration restrictions for people who have PhDs providing that they work at higher education institutions. At least this would significantly lower the cost of higher education.
    • Anonymous
    Cost of our education is prohibitive due to the following reasons -
    1. Unpopular electives that are cross subsidized by popular courses
    2. Tuition fees being diverted to research for getting grants from government
    3. Excessive administration overheads
    4. Three year under grad course streched to four years
    5. Lack of open courseware

    I doubt if foreign Phd students can fix a systemic problem like this. Education is heavily subsidized in countries that we compete with. Countries with whom we compete with don't spend 700 Bn $ per annum on defense and allow 44 million people to live on mimimum wage/unemployment. Scholarships are available for folks who survive a war and PTSD. We are living in denial and obvious decline.
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited
    A shortsighted approach will lay more emphasis on "nationality" rather than knowldge and innovation. In my view, there should be respect for performance and achievement rather than for only the satisfaction of a native having led thereto. We are coming closer to each other and bridges are being built between countries to bring them closer. Thus thewalls between nations are being broken by and by. In a sense, we are inhabitants of a Universal village and need to make use of the best contributors from wherever they come by selecting them after they have crossed toghest tests. Thus, if a Chinese or an Indian is more innovative than his US competitor, should the latter still be preferred merely because he is a local? If done, that will surely retard proper development.
    Let's also note that US nationals too are excelling outside US. Laying undue emphasis on nationality is a politicians' game that can havoc innovation and growth and let us be wary of that.
    • fedUpWithEggHeads
    • FedUp, Not an EggHead
    This study is an embarassment. I can't believe he is still trying to pass off this patent study that matches ethnic-sounding names as a proxy for H-1B Innovation. The vast majority of the H-1B workers are not innovators -- they are worker-bees.

    Just because you are not seeing terrible complaints about the H-1B program from native workers does not mean that it has little effect on these native workers. You have to look at the potential workers that avoid STEM fields because they feel that the competition is one-sided -- those people will never go into STEM fields because they see more lucrative fields elsewhere.

    HBS needs to understand that the majority of native STEM workers know how this program has effected their livelihoods -- and they are not happy with the effect on their earnings.
    • NS
    • H1B worker with a spouse who's an MBA but is illegal for her to open a business.
    The 'research' the author cites can be used to say, that the increase in patents by Indian and Chinese (aka 'immigrant innovation') not due to the H1-B visa but despite it.

    There are very strict immigration laws for a highly-skilled worker, which further restricts the ability to take risk, get into entrepreneurship ventures and to innovate. For example: did you know that the spouse of an H1-B visa holder (i.e. on H4 visa) cannot be in any form of money-earning employment. Be it at McDonalds or at NASA. They also cannot open any business and earn money (and provide further employment). So most often, the H1B visa holder is the only earning memeber in the family... tied to the company and not mobile. This greatly reduces the risk-taking-ability and any scope of innovation for majority of the population.

    The 1% increase in patents despite this scenario is quite commendable. With relaxation of the immigration laws, I am sure there would be more far reaching consequences.
    • Mayur Vegad
    • Manager
    A meeting with a bottom line agenda among the stake holders of hi-tech firms, regulators and tax department shall be a rational step.
    Globalization needs to be understood. One cannot expect affecting countries reject american technologies and products.
    Current situation is just due to lack of holistic approach driven by some insecurities and incompetence.
    • Werner Michelle
    • Manger, FFC
    I'm not convinced that it need have any bearing on the job market. Free market principals are the sort of thing that will moderate themselves if not hindered. The key there being NOT hindered. That means that when you have politicians meddling into it on either side you tend to skew the results. I have a buddy, he runs one of several local fly shops near my house. He's from Germany. Now obviously he's obviously an educated immigrant (as well as an avid fly fisherman) and from everything I can gather people don't discriminate where a person is from as long as they are supplying a needed product or service. Be that something new to the market or something ago old. When I want to get a reel I go to him. If I want good Mexican food I go to the guy down the street. Neither are from here, but both provide a crucial service to the community. What happens if you remove people like
    this? There is both a human side and a logistical side.
    • Anonymous
    Whether it is native STEM or immigrant STEM, what we should be discussing is the environment that fosters innovation, research, risk taking ability and entrepreneurship. Most inventions so far were funded with public money - either tax payer money going into labs( Lawrence Livermore, Los Alamos, Sandia, Brookhaven, Pacific Northwest, Argonne, Oak Ridge, Idaho, Lawrence Berkeley etc.) or household savings funnelled by mutual funds into private equity or venture capital. Without tax incentives, subsidies and government help nothing will come out of private sector oligopolies & monopolies. The urge to innovate dies once the founder-pioneer passes away or when the company grows through mergers and acquisitions - it becomes too busy consolidating and keeping it's flock. Small and medium sized businesses are where the seeds of innovation are planted. Let's mend the H-1B program and not end it. Allowing and encouraging H-1B holders an
    d native STEM grads to start companies once they come out of college will provide a boost to innovation. It's only through innovation that we will come
    out of the current recession. H-1B holders have to wait in a 6 year (at a minimum) queue before they even become eligible to start anything of their own... obviously they will become "worker bees" in the mean time. None of them are allowed into our national laboratories for fear of piracy. University research departments don't hire H-1B folks for research. There are very bright and competent people from Indian Institutes of Technology (IITs) who don't need a PHD to work in cutting edge technology. No wonder most of them enroll into an MBA, and end up working for an investment bank derivatives department or marketing Pepsi products. This is how we lose STEM talent. It's economics that dictates where people end up not their passion. Passion and dreams are stuff for Hollywood movies.
    • Anonymous
    I just saw 150 IT workers get displaced by H1bs. Tell them they are not negatively effected.
    • Anonymous
    My wife (Master Science-UW)has been forced to be a contracter for 6 years at Microsoft. Her counterparts who are full time "employees" with microsoft are HI-B visa immigrants. How does that work out? she contributes to the success of Microsoft but the HI-B gets the fulltime position.
    • Dean
    the whol argument is ridiculous. Companies don't bring in H1b workers because there's a shortage - they do it plain and simple because they are cheap and easy to manipulate. The irony is, that H1b workers are actually more expensive, in that they take longer to get the same work done, and usually do it in an inferior way. All workers hers on H1b visas should be sent home immediatly..
    • James Bowery
    • Diogenes Institute
    The above review purports to quote the cited study as saying

    "We do not find any substantive effect on native scientists and engineers across a range of labor market outcomes like employment levels, mean wages, and unemployment rates," the paper states.

    Yet nowhere in that study does that sentence appear. Nor does it appear that any such statement could reasonably be inferred from the study.
    • Tom Gahlberg
    • Consultant
    I'm an American and have been a programmer for 20 years. Since the H1-B visa program started I have seen a steady decline in the quality of the software that is running our nations government and businesses, and it will continue to decline until we wake up and realize that Americans make the best programmers by far.

    The reason is simple: We value the creativity of the individual.

    Foreign programmers from India and China come from a culture that values being told what to do and following orders. Initiativity, creativity, and original thinking are not part of the genetics of their culture. And in addition, they are only concerned about making money to send to their families back home. The quality of their work is not a concern to them. The programming product I've seen written by H1-B programmers is virtually across the board always low-quality cut and paste junk.

    So why is the program still in existence? Because the big banks save money in the short term. Just wait. In 5 years they will be choking under this poor quality product.

    Any talented American programmer who has worked with H1-B's knows exactly what I'm talking about.
    • Romish Badani
    • CEO, Bridge US
    I was amused to find this article so late.
    The topic of United States employers hiring foreign national employees through programs like the H-1B visa is a polarizing issue with plenty of misconceptions. As Harvard Business School professor William Kerr noted in 2011, the unfortunate reality is that "as the H-1B issue has become more controversial, the amount of available data has shrunk," allowing these misconceptions to continue and be used for political leverage. Kerr's research attempts to shed light on the economic implications of the H-1B visa program, but several of the assertions in the research seem inconsistent with other notable research and facts about the H-1B process.

    I wrote a more in-depth response to this on my company blog: