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Understanding the Economic Impact of the H-1B Program on the U.S.

Publication Abstract

PDF Bound, John, Gaurav Khanna, and Nicolas Morales. 2016. "Understanding the Economic Impact of the H-1B Program on the U.S." PSC Research Report No. 16-857. 3 2016.

Over the 1990s, the share of foreigners entering the US high-skill workforce grew rapidly. This migration potentially had a significant effect on US workers, consumers and firms. To study these effects, we construct a general equilibrium model of the US economy and calibrate it using data from 1994 to 2001. Counterfactual simulations suggest that immigration increased the overall welfare of US natives, and had significant distributional consequences. In the absence of immigration, wages for US computer scientists would have been 2.6% to 5.1% higher and employment in computer science for US workers would have been 6.1% to 10.8% higher in 2001. On the other hand, complements in production benefited substantially from immigration, and immigration also lowered prices and raised the output of IT goods by between 1.9% and 2.5%, thus benefiting consumers. Finally, firms in the IT sector also earned substantially higher profits due to immigration.

Country of focus: United States of America.

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