WORKING PAPER 05-15

Outsourcing and Skill Imports: Foreign High-Skilled Workers on H-1B and L-1 Visas in the United States

by Jacob Funk Kirkegaard, Peterson Institute for International Economics

December 2005

Jacob Funk KirkegaardUS imports of foreign, high-skilled workers on H-1B and L-1 visas increased rapidly in the late 1990s, followed by a marked slowdown after 2001, indicating the highly cyclical nature of both visa programs. Indian nationals and immigrants working in computer-related occupations dominate the H1-B and L-1 population in the United States. A broad range of US industries and educational institutions employ H-1B recipients, with information technology being the dominant sector. The author finds evidence of aggressive wage cost cutting among some H-1B employers, including paying H-1B recipients only the legally mandated 95 percent of the prevailing US wage, but no evidence of systematic abuse of the system.

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