Temporary Immigrants in a High-Skilled Labour Market: A Study of H-1Bs

Abstract

High-skilled immigration to the United States is a growing area in immigration, labour and policy research. Research on this subject focuses on the labour market impact of the largest skilled immigrant group: H-1Bs, temporary visa-holders with at least a baccalaureate degree. Many studies have demonstrated that these workers are paid the prevailing wage, yet they continue to be recruited despite unemployment and wage stagnation in H-1B sectors. In this paper I argue that, to understand the attractiveness of H-1Bs, we must look beyond their effects on wages and unemployment, and frame the flow of skilled migrants to the US in terms of the broader advantages they provide: flexible labour, the most up-to-date skills, and the lower expectations of immigrants regarding working conditions and benefits. I broaden the debate on skilled immigrants by examining the relationship between recently arrived immigrant status and two crucial labour market dimensions: contingent employment and eligibility for employer-subsidised health-care and retirement benefits. In addition, wage differentials are reassessed with contingent status, years since immigration, and high-tech industry controlled. My findings support the conclusions of prior studies that H-1Bs are not ‘cheap labour’; rather, this study shows they are utilised as flexible labour.

Keywords:

• Skilled Migration
• Labour Market
• United States
• Flexibility

Acknowledgements

I would like to thank Roger Waldinger, Don Treiman, Adrian Favell and the three anonymous JEMS referees who made constructive suggestions on earlier drafts of this article.

Notes

1. See, amongst others, the following websites for examples: www.zazona.org, www.h1-b.info, www.h1bsucks.com.

2. Defining non-standard/contingent work is a difficult task (Castells 1997; Lowell and Taylor 2000; Tilly 1996) and will be discussed at greater length in subsequent sections of this paper. For the moment, non-standard jobs are any jobs that are not full-time or that last for less than one year.

3. More information about how I proxy H-1B status follows in the methods section.

4. According to the 2002 Yearbook of Immigration Statistics (US Department of Homeland Security 2002), which includes an especially thorough section on the characteristics of H-1Bs.

5. Though it is possible to do so, I do not differentiate the foreign-born by citizenship. The addition of a citizenship dummy was attempted in all models, and was insignificant after controlling for years since immigration.

6. Other occupation dummy variables, including dummies for ‘lesser-skilled’ as well as ‘standardised’ occupations, including repair and keyboarding work, were explored and found insignificant in all models. Occupations included in the ‘high-tech’ dummy are found in Table 1.

7. It is possible that selectivity bias exists in these wage estimates, and that immigrant status may affect selection into contingent work independent of its effects on wages. I attempted simultaneous equation modelling to correct for correlations in these error terms but the subsample of contingent workers was too small to allow for this (less than 5 per cent of the wage sample, N = 160). In an earlier draft of this paper (Reichl 2005), I included part-time workers in my sample and included the inverse-Mills ratios for contingent status as explanatory variables in the log earnings equations, jointly estimating the contingent-status and earnings equations following the procedure suggested by Lee (1978) and Lowell and Taylor (2000). The coefficients for the inverse-Mills ratios were insignificant, thus we can conclude that sample selectivity bias is not a concern (see Lee 1978 for a description of the full procedure). Further support for this conclusion is found by Lindsay Lowell. His paper also assesses wage differences between contingent and core workers in H-1B industries and finds no selectivity bias, though he does find wage differences (Lowell and Taylor 2000).

Additional information

Notes on contributors

Renee Reichl Luthra

Renee Reichl Luthra is PhD Candidate in the Department of Sociology at the University of California Los Angeles