Foreign Scientists, Technology professionals, Engineers, and Mathematicians (STEM workers) Boost Everybody's Wages


STEM Workers

A new National Bureau of Economic Research working paper looks at how H-1B visa workers affected the wages of college-educated and non-college-educated native workers in 219 American cities between 1990 and 2010. The economists find that H-1B workers are good for economic growth and increasing wages. The researchers find that …

…a rise in the growth of foreign STEM by one percentage point of total employment increases growth in the wages of native college educated workers by a statistically significant 7-8 percentage points.The same change had a smaller but usually statistically significant effect on the wages of native non-college educated workers equal to 3-4 percentage points. No statistically significant effects were found for the growth of native employment. We also find that an increase in foreign STEM growth had a significantly positive impact on growth in housing costs for college educated workers. The increased cost in non-tradable services (housing) absorbed about half of the increase in the purchasing power of college educated wages.

Finally, we use a simple model of city-level production and the estimated wage and employment effects to calculate the effect of STEM on total factor productivity (TFP) and skill-biased productivity (SBP). We find that STEM workers have positive effects on both TFP and SBP. Aggregating at the national level, inflows of foreign STEM workers may explain between 30 and 50% of the aggregate productivity growth and 4 to 8% of the skill-bias growth that took place in the U.S. between 1990 and 2010.

BTW, total factor productivity meaures the efficiency all inputs to a production process. Increases in TFP result usually from technological innovations or improvements.

It's just stupid to send away talented people who want to work here. Clearly whoever said that every foreign student who earned a scientific or technical degree at an American University should find a green card stapled to his or her diploma was right.