H-1B visa programme benefits both the US and India, new study says

The increase in IT sector productivity allowed India to eventually surpass the US in software exports, the researchers said.
The increase in IT sector productivity allowed India to eventually surpass the US in software exports, the researchers said.PHOTO: ST FILE

BANGALORE (BLOOMBERG) - The controversial H-1B visa programme, widely criticized for costing American workers their jobs, has actually provided economic benefits for both the US and India, according to a new study from researchers at the Center for Global Development and the University of Michigan.

The combined incomes for the two countries as a result of the US visa program rose by about US$17.3 billion (S$23.55 billion) or 0.36 per cent, and the total IT output from both countries rose by about 0.45 per cent in 2010, say researchers Gaurav Khanna of the Center for Global Development and Nicolas Morales at the University of Michigan. While recognizing negative repercussions for some workers, the study said that on the whole US-born employees were wealthier by about US$431 million in 2010 because of the programme.

"The average worker in each country is better off because of immigration, and USnative workers have made big gains because of the H-1B visa program," said Khanna.

The research report titled "The IT Boom and Other Unintended Consequences of Chasing the American Dream" is an in-depth look at the H-1B visa program and its impact on the US and Indian economies since the early 2000s. The visa programme allows companies in the US to employ skilled foreign workers in specialty occupations.

The programme, which is heavily used by India's US$155-billion IT services industry, has been under fire from US President Donald Trump. His administration has taken steps to curtail its use and he has talked of giving the program a complete overhaul.

In India, the H-1B visa program is often criticized for causing a 'brain drain.' But skilled Indian workers migrating to the US have led to the dramatic expansion of India's own technology industry and contributed to a growing skilled workforce in the country, the authors said. More students switched to computer science and engineering fields because of better prospects and those who did not migrate helped boost the Indian IT services industry. Some H-1B visa holders returned with additional knowledge to improve the sector.

The increase in IT sector productivity allowed India to eventually surpass the US in software exports, the researchers said.

Because immigration led to better technology being built, the overall productivity of other sectors increased and consumers of computer-related goods benefited from better software and hardware prices, a 1 per cent decline for US IT products and a 7.4 per cent decrease for Indian products.