Prof. Chad Sparber testifies before U.S. Senate subcommittee

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Chad Sparber, associate professor of economics, testified before the Senate Subcommittee on Immigration and the National Interest on Thursday, February 25.

During the hearing, Sparber discussed the significance of foreign-born STEM workers on native-born job opportunities and the role that the H-1B Visa program has had on technology development and job creation in the United States.

Here are some key quotes from his testimony:

The rise in foreign STEM employment between 1990 and 2010 increased the inflation-adjusted wage growth rate of college-educated natives by about 3.7 percentage points above what it otherwise would have been.

Twenty-five percent of high-tech companies founded between 1995 and 2005 had at least one immigrant founder. Over 40 percent of companies in the Fortune 500 in 2010 were founded by an immigrant or the child of an immigrant.

The bottom line is that the H-1B story is inseparable from the technology story, and there are only three broad policy alternatives: allow H-1B workers into the country to produce skilled work here; keep skilled workers out of the country and import technology from abroad; or close our borders to both skilled workers and technology.

In subsequent testimony provided to Senator Chuck Grassley (R-Iowa) for the record, Sparber said:

In the unpublished working paper versions of our work, we demonstrate that inflows of foreign STEM workers cause Americans to move into occupations requiring more creative and problem-solving skills that often, though not always, pay higher wages than traditional STEM occupations … we find no evidence that foreign STEM workers cause net native-born American employment losses. We find strong evidence that they cause wage and productivity gains.

One of the few unfortunate realities of our dynamic economic system is that it involves difficult firm restructuring decisions that sometimes lead to structural job loss. I have great empathy for anyone who is unemployed. I think we should help people who have lost their jobs. But those questions are fundamentally about helping Americans who are suffering. And those questions are larger than and separate from questions about the H-1B program, other skilled foreign worker programs, or firm hiring practices. I would be hesitant to tell firms who they can and cannot hire, but would be in favor of assisting Americans when in need.