Measures to restrict the use of H-1B visas would represent a serious policy mistake according to NFAP study

Updated on: Monday, May 06, 2013

Challenging the assertion of several American lawmakers that H-1B visas grabbed by Indian IT professionals eat into their employment market, a new study by an eminent US think-tank has said that contrary to such perception, Indian techies create jobs in the country.

The report by the National Foundation for American Policy (NFAP) said contrary to the popular perception, India-based companies do not use up most of the yearly H-1B allotment.

Between fiscal 2006 and 2011, the top 25 India-based companies utilised between six and 15 per cent of the new H-1B visa approved for initial employment, and 19.9 per cent in fiscal 2012.

In fiscal 2012, the 26,865 new H-1B visas approved for the top 25 India-based companies equaled only 0.017 per cent of the US labor force. Many of these companies perform services under contract to assist US companies in focusing on core business functions, it said.

The report's author Stuart Anderson, NFAP's executive director, said, "Research indicates measures to restrict the use of H-1B visas are not based on sound evidence and would represent a serious policy mistake that would shift more work and resources outside the United States."

According to economists Giovanni Peri, Kevin Shih and Chad Sparber, rather than harming US workers or the US economy, H-1B visa holders contributed "between 10 and 25 per cent of the aggregate productivity growth... that took place in the United States from 1990 to 2010."

Peri, Shih and Sparber also found, "An increase in foreign STEM workers of 1 per cent of total employment increased the wage of native college educated workers (both STEM and non-STEM) over the period 1990-2000 by 4 to 6 per cent."

STEM stands for Science, Technology, Engineering and Math.

Economist Madeline Zavodny concluded that between 2001 and 2010, each additional 100 approved H-1B workers were associated with an additional 183 jobs among US natives.

A proposed immigration reform bill introduced in the Senate suggests overhauling the H-1B visa system to end its use in outsourcing Americans jobs to countries like India.

Measures to restrict the use of H-1B visas would represent a serious policy mistake according to NFAP study

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