Controversial visa scheme benefits both US and India: Study

BANGALORE • The controversial H-1B visa programme, widely criticised for costing American workers their jobs, has actually provided economic benefits for both the United States and India, according to a new study by researchers.

The combined incomes for the two countries, as a result of the US visa programme, rose by about US$17.3 billion (S$23.9 billion), or 0.36 per cent, and the total information technology output from both countries rose by about 0.45 per cent in 2010, say researchers Gaurav Khanna from the Centre for Global Development and Nicolas Morales from the University of Michigan.

While recognising 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 US native workers have made big gains because of the H-1B visa programme," said Mr 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 programme and its impact on the US and Indian economies since the early 2000s. The programme allows companies in the US to employ skilled foreign workers in specialised occupations.

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

  • $24b

    Approximate rise in combined incomes for the US and India as a result of the H-1B visa programme.


    Approximate rise in total IT output from the US and India in 2010.

In India, the programme is often criticised 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 study 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 study said.


Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on August 09, 2017, with the headline Controversial visa scheme benefits both US and India: Study. Subscribe