The impact of the H-1B cap exemption on Ph.D. labor markets
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The impact of the H-1B cap exemption on Ph.D. labor markets Yinjunjie Zhang1
· Marco A. Palma2
Received: 23 January 2019 / Accepted: 21 June 2019 © Springer-Verlag GmbH Germany, part of Springer Nature 2019
Abstract The American Competitiveness in the Twenty-First Century Act of 2000 (AC21) eliminated the H-1B cap for foreign employees of academic, nonprofit and government research organizations. This act potentially affects the job preferences of newly graduated foreign Ph.D. students. Choosing a career in an uncapped H-1B-qualified entity means circumventing the risk of facing the fiercely competitive H-1B application process and possibly avoiding potential losses due to a visa rejection. We use data from the census of Ph.D. graduates to examine the causal effect of this policy change on academic and industry labor markets in the USA. We find that as a result of this policy, Ph.D. graduates with temporary visas are 5 percentage points more likely to pursue a job in academia, and 3–4 percentage points less likely to choose a job in industry. A series of robustness checks exclude other external factors around the same time period driving the results. Keywords Academia · H-1B visa · Immigration law JEL Classification K37 · J61 · F22
We gratefully acknowledge comments from the participants at the 2017 Agricultural and Applied Economics Association Annual Meeting, Chicago, Illinois. We also benefited from communication with Catalina Amuedo-Dorantes and Chad Sparber. Electronic supplementary material The online version of this article (https://doi.org/10.1007/s00181019-01721-5) contains supplementary material, which is available to authorized users.
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Yinjunjie Zhang [email protected] Marco A. Palma [email protected]
1
Crawford School of Public Policy, Australian National University, Canberra, ACT 2601, Australia
2
Department of Agricultural Economics, Texas A&M University, 2124 TAMU, College Station, TX 77843-2124, USA
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Y. Zhang, M. A. Palma
1 Introduction Immigration policy is currently one of the most widely discussed topics in government and among regular citizens. It is a sensitive issue that evokes strongly polarized views. The majority of arguments on immigration center around low-skilled, low-paying jobs. We, on the other hand, concentrate on the highest skilled labor market—the Ph.D. labor market, through which foreign experts and young scholars are normally hired using the H-1B visa program. There are competing views among researchers and policy makers on whether the US government should assign more visas and allow foreign high-skilled workers to stay in the US labor market or should make the current immigration policy stricter to prevent immigrants from displacing native US workers. Policy changes surrounding the H-1B temporary visa program have been debated heatedly since the program was first implemented in the 1990s. The H-1B program administrates the eligibility of full-time employment for the majority of US-trained, high-skilled immigrants. In particular, for newly graduated for
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