Highly-Skilled Immigrants Create Jobs for Americans, According to Study

Tuesday, December 20, 2011

Immigrants with specific skill types do not compete with native workers, but instead create jobs for American workers and improve their rates of employment, according to a nationwide study written by Madeline Zavodny, professor of economics at Agnes Scott College.

The report, “Immigrants and American Jobs,” is based on a multi-year statistical analysis and examines the relationship between the foreign-born workforce and the employment rate for native U.S. workers. Released by the American Enterprise Institute (AEI) and the Partnership for a New American Economy, the report focuses on two groups often seen by policymakers and employers as critical to the economy: foreign-born adults with advanced degrees and foreign workers here on temporary-employment visas.

In both cases, the analysis shows that more foreign-born workers means more jobs for U.S. natives—as many as 262 more native-born workers employed for every 100 foreign-born workers with advanced U.S. degrees who work in science, technology, engineering or math (“STEM”) fields. The report also looks at the fiscal impact of the foreign-born and finds that, on average, all immigrants pay more in taxes than they receive in benefits, particularly for highly educated immigrants.

"This report adds important evidence to the case that economists have been making for years: that identifiable categories of immigrants unquestionably give a lift to native employment," said Zavodny.  "But I hope it's not just economists who take note - the study offers insight for legislators who need to know what's at stake in immigration policy. I’d like to see an increase in the fraction of green cards awarded on the basis of employment and a better sorting system than first come, first served or country of origin, but instead awarding those green cards based on employer need."

One of the definitive findings is that immigrants with advanced degrees boost employment for native U.S. workers. This effect goes beyond the 2.62 jobs for every STEM worker with an advanced degree from U.S. universities: An additional 100 immigrants with advanced degrees working in STEM fields, regardless of where they earned the degree, creates an additional 86 jobs for U.S. natives. And an additional 100 immigrants with advanced degrees, regardless of field or where they obtained their degrees, creates an additional 44 jobs for U.S. natives.

The report also shows clear job creation from foreign workers on temporary-employment visas: Adding 100 workers in the H-1B visa program for skilled workers—a program that exhausts its arbitrary numerical limitation each year, including this year—results in an additional 183 jobs among U.S. natives. Likewise, adding 100 workers in the H-2B program for less-skilled non-agricultural labor results in an additional 464 jobs for U.S. natives.

And looking at all foreign-born workers in the aggregate, the report’s analysis yields no evidence of any negative impact on U.S. employment—even under the current immigration system, which is not designed to maximize job creation. Finally, the study finds that highly educated immigrants pay far more in taxes than they receive in benefits.

While the study didn’t examine the specific possible connections between skilled immigrant workers and American jobs, the identification of those connections is the logical next phase of this research, according to Zavodny.

“The next step is to unpack that black box and find out if the immigrants are founding companies that then create jobs or working for companies that go out and hire other workers to support their work, such as a salesperson and a secretary to support a new product designed by an immigrant engineer, for instance,” Zavodny said. “These are also consumers who can stay in the country and make good money, thereby supporting stores and other services.”

To identify the employment effect of immigration, the study analyzes annual data going back to the year 2000 from the U.S. Census Bureau and from applications for temporary-worker visas—to ask whether having a higher share of foreign-born workers in a given state increases or decreases the employment rate among U.S. natives there.

The report calls for specific legislative proposals that could create jobs for U.S. workers, including priority for foreign workers who earn advanced degrees from U.S. universities, especially those who work in STEM fields; an increase the number of green cards (permanent visas) for highly educated workers; and more temporary visas for both skilled and less-skilled workers.

The full report is available at www.RenewOurEconomy.org/aeireport.

Agnes Scott College educates women to think deeply, live honorably and engage the intellectual and social challenges of their times. Students are drawn to Agnes Scott by its excellent academic reputation, exceptional faculty and metropolitan Atlanta location—offering myriad social, cultural and experiential learning opportunities. This highly selective liberal arts college is known for its diverse and dynamic intellectual community. Through SUMMIT, it provides every student, regardless of major, with an individualized course of study and co-curricular experiences that develop leadership abilities and understanding of complex global dynamics.