Modified August 26, 2015

High Skilled Immigration Reform

The United States immigration policy is the set of federal laws and provisions that regulates the entry and the stay of non-US citizens on national territory. U.S. immigration policy provides two paths for the lawful entry of non-citizens. The first is permanent admission which grants access to the status of “lawful permanent resident” eligible to work in the U.S., and who may later apply for U.S. citizenship. The second is temporary admission which grants entry to the U.S. for a specific purpose and for a limited period. Furthermore, in addition to lawful aliens, undocumented aliens are those who either enter the country illegally or overstay their temporary visa.

Immigration has an important impact on several aspects of the U.S. economy. It has been the source of about half of the U.S. population growth over the last decade. College educated immigrants, highly concentrated in the sciences, engineering, and business, contribute to scientific and technological innovation, entrepreneurship, and job-creation in the U.S. Less educated immigrants, highly concentrated in manual labor and personal services, have filled  jobs that have seen a decrease in the supply of native workers, and have helped to maintain the low cost of those services. While both types of immigrants compete for jobs with native workers, potentially reducing demand for some native workers; immigrants also stimulate investment and encourage firm expansion hence stimulating the labor market for other native workers.

There is bipartisan support for high-skilled reform; however, proposals to enhance high-skilled immigration have stalled due to contentious debates over how to address the problem of undocumented aliens. In order for high-skilled reform to occur, it will likely need to be part of a comprehensive immigration package.


These issues often arise in discussions of immigration policies:
  • How to evaluate the effects of more open immigration policies on the U.S. labor market. The debate involves whether wages would fall for some categories of native workers and rise for others, whether firms will create more jobs or whether employment of natives will decrease.

  • What would be the effect of legalizing undocumented immigrants? The effect on immigrant wages and investment in skills; impact on native wages; and, possible attraction of more immigrants are part of this issue.

  • How the schooling choice of natives can be affected by an increase in the number of student visas. How the labor markets in science and technology are affected by highly educated immigrant and study visas.

  • Effects of H-1B visa on U.S. innovation and on the wages of U.S. scientists. Do foreign-born scientists compete with native ones depressing native opportunities, or do foreign-born scientists complement and stimulate native opportunities? Would an increase of H-1B visas increase scientific output?

  • What is the cost or benefit for a government to attract more immigrants? Who bears the cost and who enjoy the benefits, between the state and federal government?

  • The current system of permanent admissions is focused mainly on family reunification with a smaller and rigid quota for employment-sponsored permanent residency. This implies that the working skills of immigrants are not necessarily those needed by the U.S. labor markets. Some scholars favor a point system (similar to Canada and Australia) that rewards education, type of skills, knowledge of the language, and age as a better way to select immigrants.

  • How immigration policies affect the type of immigrants selected. What is the effect of family-based policies (such as in the U.S.) on the schooling, age, and skills of immigrants selected? How would employment-based policies or a point system change the characteristics of immigrants admitted to the U.S.?

  • How immigration status (documented or not, permanent resident, citizenship) affect the integration and labor market performance of foreign-born.

  • Are the effects of immigrants on labor markets, housing markets, and public services mainly local? Do they spread to other localities? Policies are federal but many effects are local. Should states have policies that affect their ability to attract immigrants; and if so, what would be the consequences?

TAP Academics researching high-skilled immigration policies include:

Giovanni Peri of University of California researches human capital, growth, and technological innovation. His recent focus has been on the impact of international migrations on labor markets, housing markets, investments, and productivity of the receiving countries.

“Innovation and technological progress are the engines of economic growth. Hence the attraction of human capital and skills is central to continued economic success.” From a UCTV Prime Vote video, The Case for Immigration, March 16, 2012

William Kerr of Harvard Business School writes about entrepreneurship, innovation, and immigration. He has focused on the H-1B policies, granting temporary immigration to highly educated aliens, and analyzed the impact on innovation in U.S. cities.

Additional Academics with expertise in this area include:

George Borjas of Harvard University is a labor economist specializing in immigration issues. His research on the economic impact of immigration has played a role in the debate over immigration policy in the United States and abroad.

Gordon Hanson of University of California, San Diego specializes in the economics of international trade, international migration, and foreign direct investment. His current research examines the international migration of skilled labor, border enforcement, and illegal immigration.

These sources are a good place to start in understanding immigration policy issues: In “Supply Side of Innovation, The: H-1B Visa Reforms and US Ethnic Invention,” William Kerr and William F. Lincoln uses immigration and patent data to examine the effect of skilled immigrants on innovation in the United States. Giovanni Peri, with colleague Gianmarco Ottaviano, found that U.S. cities that attracted immigrants experienced a significant increase in average wages and in housing values in “The Economic Value of Cultural Diversity: Evidence from U.S. Cities.” Professors Peri and Ottaviano examined the effects of immigration from 1960-2006 on the wages of native U.S. workers of various skill levels in “Rethinking the Effect of Immigration on Wages.” With “The Effect of Immigration on Productivity: Evidence from US States,” Professor Peri also shows that attracting highly educated immigrants is a strategy to increase employment, investment, and productivity in local economies. George Borjas examines how the growth in the number of foreign students enrolled in graduate programs affects native enrollment in those programs in “Do Foreign Students Crowd Out Native Students from Graduate Programs?.” Gordon Hanson proposes that expanding freedom of movement to include the right to migrant internationally would likely raise both global income and global welfare in “International Migration and Human Rights.” In “How Much Does Immigration Boost Innovation?,” Jennifer Hunt and Marjolaine Gauthier-Loiselle show that a 1 percentage point increase in immigrant college graduates' population share increases patents per capita by 9-18 percent.

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