Closing Economic Windows: How H-1B Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages During the Great Recession

For the U.S. tech industry to grow, it needs an adequate supply of high-skilled workers. Given that the U.S. higher education system produces only 51,000 such graduates annually, technology companies also hire foreign-born workers through the H-1B visa system.

The annual cap of 65,000 visas, however, is too low to meet the need, stymies the growth of U.S. tech companies and hinders job creation for U.S.-born workers as the companies expand. The cap also affects the communities in which these companies are located as a result of lost taxes and investments. These are the major findings of Closing Economic Windows: How H-B1 Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages during the Great Recession. Using estimates from theories on how H-1B visa holders interact with the U.S. high-skilled workforce, Giovanni Peri et al conclude that rejected H-1B visa applicants prevented U.S. metropolitan areas from hiring as many as 231,224 U.S.-born workers in 2007-08 and slowed wage growth for workers in computer-related industries. Consequently, the U.S. tech industry missed an opportunity to grow substantially, which would have quickened the pace of recovery out of the Great Recession. The authors suggest an urgent need for less restrictive immigration policies so as to ensure greater economic growth for the U.S.

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