Madeline Zavodny
Economic Review, Vol. 88, No. 3, 2003
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Employment in the information technology (IT) field rose rapidly during the late 1990s. Many IT employees are foreign born and are working in the United States with H-1B visas—temporary nonimmigrant visas issued for terms of up to six years. Critics of the H-1B program contend that it reduces job opportunities and wages for native workers. The programs' supporters argue that H-1B workers—who typically have at least a bachelor's degree in a specialty such as computer programming—help address a shortage of skilled native workers and fill positions that would otherwise go vacant.
This article examines whether the H-1B visa program negatively affects IT workers' wages. The author uses data on labor condition applications (LCAs) filed with the U.S. Department of Labor to investigate whether the number of H-1B workers in an area, relative to the total number of IT workers in that area, is negatively associated with the level of and change in average IT wages and the unemployment rate among IT workers in that area.
The results provide little support for claims that the program has a negative impact on wages. However, some results do suggest a positive relationship between the number of LCA applications and the unemployment rate a year later. The failure to find an adverse wage effect does not necessarily indicate that H-1B workers do not depress wages but perhaps signals that any effect is difficult to find, as previous studies concluded.
September 2003