High-skilled immigration is dramatically transforming the tech sector in the United States.1 In 1975 immigrants accounted for one in 12 inventors in America. Today it’s one in 3.5. This surge is due to immigrant concentration in science and engineering fields, and factors that make the United States attractive, such as access to the latest technologies and high pay levels. The impact has been most evident in advanced technology sectors in areas such as Boston and Silicon Valley, but nontech companies including JPMorgan Chase, KPMG, and Walmart are also pursuing more global talent.2 Studies tout the benefits that skilled immigrants bring to the workforce, including their roles in facilitating global teams and contributions as taxpayers.3
But not everyone is happy with the current system, most notably older tech workers. In an effort to secure work in the booming Silicon Valley economy, for example, older workers have been scrambling to learn new coding skills and making other changes (including updating their wardrobes and even undergoing plastic surgery) in order to appear more youthful.4
They’re not overreacting. My analysis of employee-level U.S. Census Bureau data and qualitative interviews show that U.S. tech workers older than age 40 have good reasons to be concerned about how globalization affects their career longevity. In addition to competing with greater numbers of skilled foreign workers, older tech workers are now also more likely than younger workers to lose their jobs when technical work moves overseas.5
All that said, it would be a mistake to rein in U.S. immigration policy.6 Here’s why.
The largest and most prominent visa category for employment-based immigration to the United States is what’s known as the H-1B visa. Some 90% of H-1B visa recipients are individuals younger than age 40.7 Typically, economists analyze the effects of immigration through an apples-to-apples comparison of immigrants and nonimmigrants in the same general age and education bracket who are looking for employment. However, peer displacement doesn’t appear in that data set because the salary differences between workers with H-1B visas and domestic employees of similar ages and skills are minimal (in part due to a law requiring companies to pay an H-1B worker the “prevailing wage” for the position).
1. W.R. Kerr, The Gift of Global Talent: How Migration Shapes Business, Economy & Society (Stanford, CA: Stanford University Press, 2019).
2. W.R. Kerr, “Navigating Talent Hot Spots,” Harvard Business Review 96, no. 5 (September-October 2018): 80-86.
3. G. Peri and C. Sparber, “Highly Educated Immigrants and Native Occupational Choice,” Industrial Relations 50, no. 3 (July 2011): 385-411; S.P. Kerr and W.R. Kerr, “Global Collaborative Patents,” The Economic Journal 128, no. 612 (July 2018): F235-F272; and N. Smith, “America’s Need for Skilled Immigrants Isn’t Going Away,” Bloomberg, Oct. 24, 2018.
4. C. Hymowitz and R. Burnson, “It’s Tough Being Over 40 in Silicon Valley,” Bloomberg, Sept. 8, 2016.
5. M. Rogoway, “Intel Layoffs Skew Older, Spotlighting Plight of Aging Workers,” Oregon Live, June 6, 2016.
6. N. Matloff, “On the Need for Reform of the H-1B Nonimmigrant Work Visa in Computer-Related Occupations,” University of Michigan Journal of Law Reform 36, no. 4 (fall 2003): 815-914.
7. U.S. Citizenship and Immigration Services, “Characteristics of H-1B Specialty Occupation Workers,” April 9, 2018.
8. S.P. Kerr, W.R. Kerr, and W.F. Lincoln, “Skilled Immigration and the Employment Structures of U.S. Firms,” Journal of Labor Economics 33, no. S1, pt. 2 (July 2015): S147-S186.
9. Y. Zhou, “New Data on H-1B Visas Prove That IT Outsourcers Hire a Lot but Pay Very Little,” Quartz India, Aug. 1, 2017.
10. “Bill Gates: U.S. Senate Committee Hearing on Strengthening American Competitiveness,” Microsoft, March 7, 2007.
11. Kerr, et al., “Skilled Immigration.”
12. Kerr, The Gift of Global Talent.
13. In 2018, California Governor Jerry Brown announced budget cuts to the state’s community college system of $102 million. See G. Chen, “California Community College System Slammed With Budget Cuts,” Community College Review, Sept. 24, 2018.