Academic Freedom and the Economic Impact of the H-1B Program

By David North, March 21, 2017

One of the virtues of working with some very big organizations is that they can produce excellent economic research on, say, the H-1B program, while ignoring the organizations' own extensive use of that very same program.

Harvard University, for example, employs George Borjas, who is highly critical of the H-1B program and has been for years, even though Harvard itself hires large numbers of H-1Bs. For his latest take on H-1B, and how it would fare in Congress if it covered lawyers as well as techies, see here.

Similarly, there was a report out this month by the National Bureau of Economic Research, another highly regarded academic organization. Its conclusions about the H-1B program were:

Impact on U.S. Workers: Without the program there would be 6.1 percent to 10.8 percent more jobs for U.S. workers in the IT industry, and pay for those workers would be 2.6 percent to 5.1 percent higher.

Impact on Consumers: It increased the output of the industry by smaller numbers, between 1.9 percent and 2.5 percent and made an impact on prices.

Impact on Employers: Substantially higher profits due to immigration.

These findings, that the program is harmful to workers and a major boon to employers, are both welcome and not original. Many academicians — except those on IT industry payrolls, directly or indirectly — have come to these conclusions again and again.

What I find encouraging is that management of NBER, like the management of Harvard, did not prevent the publication of material that could be used to criticize its own labor practices. This is in keeping with the tradition of freedom of speech in academic settings.

NBER, like Harvard, but on a much more modest scale, hires H-1Bs, presumably for the same reason that other employers do: It provides apparently adequate workers at below-market prices.

NBER has, according to Myvisajobs.com, filed 51 labor condition applications from 2014 to 2016, though my reading of the data shows 47 LCAs. Whichever number is correct, NBER is a major user.

But the outfit does let its people talk about the problems created by the program, and that's a rare bit of good news.