HIGH SKILLED TEMPORARY IMMIGRANTS IN A SEGMENTED LABOR MARKET: A STUDY OF H-1BS

PWP-CCPR-2006-026

Abstract

High skilled immigration to the United States is a growing area in immigration, labor, and policy research. Research on this subject focuses on the labor market impact of the largest skilled immigrant group: H-1Bs, temporary visa holders with at least a baccalaureate degree. A host of 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. This paper argues that to understand the attractiveness of H-1Bs, we must look beyond their effects on wages and unemployment, and frame the flow of skilled immigrants to the US in terms of the broader advantages they provide: flexible labor, the most recent skills, and lower expectations in terms of job quality. Here I broaden the debate on skilled immigrants by examining the relationship
between recently arrived immigrant status and two crucial labor market dimensions: contingent employment and eligibility for employer-subsidized healthcare and retirement benefits. In addition, simultaneous equation modeling is utilized to assess the possibility of differing wage models for contingent and core workers in H-1B industries. My findings support the conclusions of prior studies that H-1Bs are not “cheap labor;” rather, this study shows that they are instead utilized as flexible labor.