H1B visa lowers wages, has negligible impact on patents: Study

The study also argues that the new H-1Bs cause no significant increase in firm employment

Contrary to popular perception, H-1B visas have insignificant impact on new patents in the short term and also results in lower wages, according to a study.

"We demonstrate that H-1Bs given to a firm on average do not raise the firm's patenting and/or other employment, contrary to firms' frequent claims," the three authors of the study 'The Effects of High-Skilled Immigration on Firms: Evidence from H-1B Visa Lotteries,'  write.

"Overall our results are more consistent with the second [i.e, the critics'] narrative, in which H-1Bs replace other workers to some extent, are paid less than alternative workers, and increase the firm's profits (despite little, if any, effect on firm patenting)," the authors write.

They argue that new H-1Bs cause no significant increase in firm employment.

"New H-1Bs substantially and statistically significantly crowd out median employment of other workers," they said.

The new study is quite contrary to the widely believed fact that foreign workers create American jobs.

"Our results are consistent with the possibility that H-1B and non-H-1B workers are perfect substitutes. This is notable in light of frequent claims that H-1Bs have unique skills that cannot easily be obtained elsewhere," they said.

However, the study by major US IT firms, briefed to Congressional staffers last month, states that every foreign- born worker in the US with a US STEM degree creates 2.62 jobs for US-born workers.

It also said that every H-1B visa holder creates 1.83 jobs in the US.

H-1B visas awarded between 2010 and 2013 will create more than 700,000 jobs for US-born workers by 2020.

The study was undertaken by three economist authors - Kirk Doran of the University of Notre Dame in Indiana, Alexander Gelber of the University of California, Berkeley, and Adam Isen of the Office of Tax Analysis at the US Department of the Treasury.