Workers in U.S. and India Make Huge Financial Gains Thanks to H1B Program, New Study Says

February 4, 2018

The H1B visa program resulted in a net gain of almost half a billion dollars to the U.S. economy over a fifteen-year period, according to a new study. Entitled, “The IT Boom and Other Unintended Consequences of Chasing the American Dream,” the study was released earlier this month by the Center for Global Development, a nonprofit, nonpartisan think tank dedicated to reducing global poverty and inequality through diligent research. The results of the study were derived by examining H1B visa trends from 1990 through 2010, including from hiring across various occupations and how the fledgling tech boom of the early 1990’s impacted demand for foreign talent.

Gaurav Khanna, an assistant professor of economics at the public policy school at the University of California-San Diego, co-authored the paper. According to Khavna, U.S. workers in all areas of employment enjoyed a net gain of about $431 million in 2010 due to the increased productivity and technological innovations developed in Silicon Valley, which remains the world’s foremost tech hub. And he theorizes that this increase would be all but impossible if not for the contributions of highly skilled and educated tech workers from India, which is the largest source of H1B visa holders in the United States. In an interview with Fortune, he elaborated on the link between global talent and technological innovation. “A lot of these gains are because of the fact that the tech sector is also where a lot of the innovation happens in the economy. What that does is raise the productivity of other parts of the economy as well. For example, bankers on Wall Street may not realize that their software is better because the U.S. can attract global talent and produce better IT products.” [See New Research Says H-1B Visas Created a $431 Million Net Gain For U.S. Workers, by Grace Donnelly, Fortune, 08.Aug.2017.]

According to the study, the United States isn’t the only beneficiary of the H1B visa financial net gain. Workplace productivity in India increased by roughly five percent between 1990 and 2010, and Khanna argues that this is a direct result of the H1B visa program. He theorizes that the emergence of the U.S. as the world leader in the tech industry during the early 1990s spurred an interest in computer science among top Indian students. Hoping to earn advanced degrees that could secure them employment in Silicon Valley, more students began enrolling in computer engineering programs and seeking sponsorship for visas from U.S.-based employers. However, due to strict annual H1B visa caps, some of these newly minted Indian tech experts did not gain admittance to the U.S. and so joined the expanding tech workforce in their native country. This led to an increase in innovation across the Indian tech sector, mirroring the rise in workplace productivity that was simultaneously occurring in the U.S. [See The IT Boom and Other Unintended Consequences of Chasing the American Dream, by Gaurav Khanna and Nicolas Morales, Center for Global Development, 08.Aug.2017.]

This mutually beneficially link between the U.S. H1B program and skilled Indian tech workers may be in jeopardy under the Trump Administration, however. Recent data compiled by Fortune shows that foreign interest in American tech jobs has declined for the first time in three years, potentially because of Trump’s consistent anti-immigration rhetoric. But if Khanna’s theories are correct, native-born U.S. employees are well advised to welcome their H1B coworkers. The benefits they offer could be the key to sustaining the economic viability of the United States for future generations. [See New Data Shows Foreign Interest in American Jobs May Be Declining Under Trump, by Grace Donnelly, Fortune,

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