[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/cgd/wpaper/460.html
   My bibliography  Save this paper

The IT Boom and Other Unintended Consequences of Chasing the American Dream - Working Paper 460

Author

Listed:
  • Gaurav Khanna

    (Center for Global Development)

  • Nicolas Morales

    (University of Michigan)

Abstract
With the majority of all H-1B visas going to Indians, we study how US immigration policy coupled with the internet boom affected both the US and Indian economies, and in particular both countries’ IT sectors. The H-1B scheme led to a tech boom in both countries, inducing substantial gains in firm productivity and consumer welfare in both the United States and India. We find that the US-born workers gained $431 million in 2010 as a result of the H-1B scheme. In India, the H-1B program induced Indians to switch to computer science (CS) occupations, increasing the CS workforce and raising overall IT output in India by 5 percent. Indian students enrolled in engineering schools to gain employment in the rapidly growing US IT industry via the H-1B visa program. Those who could not join the US workforce, due to the H-1B cap, remained in India, and along with return-migrants, enabled the growth of an Indian IT sector, which led to the outsourcing of some production to India. The migration and rise in Indian exports induced a small number of US workers to switch to non-CS occupations, with distributional impacts. Our general equilibrium model captures firm-hiring across various occupations, innovation and technology diffusion, and dynamic worker decisions to choose occupations and fields of major in both the United States and India. Supported by a rich descriptive analysis of the changes in the 1990s and 2000s, we match data moments and show that our model captures levels and trends of key variables in validation tests. We perform counter-factual exercises and find that on average, workers in each country are better off because of high-skill migration.

Suggested Citation

  • Gaurav Khanna & Nicolas Morales, 2017. "The IT Boom and Other Unintended Consequences of Chasing the American Dream - Working Paper 460," Working Papers 460, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:460
    as

    Download full text from publisher

    File URL: https://www.cgdev.org/publication/it-boom-and-other-unintended-consequences-chasing-american-dream
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mobarak, Ahmed Mushfiq & Sharif, Iffath & Shrestha, Maheshwor, 2021. "Returns to International Migration: Evidence from a Bangladesh-Malaysia Visa Lottery," IZA Discussion Papers 14232, Institute of Labor Economics (IZA).
    2. Gouranga Gopal Das & Sugata Marjit, 2018. "Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?," CESifo Working Paper Series 7082, CESifo.
    3. John Bound & Breno Braga & Gaurav Khanna & Sarah Turner, 2021. "The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 163-184, Winter.
    4. Dany Bahar & Andreas Hauptmann & Cem Özgüzel & Hillel Rapoport, 2019. "Migration and Post-conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia," Growth Lab Working Papers 149, Harvard's Growth Lab.
    5. Cha’Ngom, Narcisse & Deuster, Christoph & Docquier, Frédéric & Machado, Joël, 2023. "Selective Migration and Economic Development: A Generalized Approach," IZA Discussion Papers 16222, Institute of Labor Economics (IZA).
    6. John Bound & Gaurav Khanna & Nicolas Morales, 2017. "Understanding the Economic Impact of the H-1B Program on the United States," NBER Chapters, in: High-Skilled Migration to the United States and Its Economic Consequences, pages 109-175, National Bureau of Economic Research, Inc.
    7. Catalina Amuedo‐Dorantes & Kevin Shih & Huanan Xu, 2023. "The implications of optional practical training reforms on international student enrollments and quality," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 253-281, April.
    8. Ghose,Devaki, 2021. "Trade, Internal Migration, and Human Capital : Who Gains from India’s IT Boom?," Policy Research Working Paper Series 9738, The World Bank.
    9. Patrick S. Turner, 2022. "High‐Skilled Immigration and the Labor Market: Evidence from the H‐1B Visa Program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(1), pages 92-130, January.
    10. Yao Pan & Jessica Leight, 2021. "Educational Responses to Migration-Augmented Export Shocks: Evidence from China," Working Papers 2021-14, The George Washington University, Institute for International Economic Policy.
    11. John Bound & Gaurav Khanna & Nicolas Morales, 2017. "Understanding the Economic Impact of the H-1B Program on the U.S," NBER Working Papers 23153, National Bureau of Economic Research, Inc.
    12. Das, Gouranga Gopal & Marjit, Sugata & Kar, Mausumi, 2020. "The Impact of Immigration on Skills, Innovation and Wages: Education Matters more than where People Come from," Journal of Policy Modeling, Elsevier, vol. 42(3), pages 557-582.
    13. Nicolas Morales, 2019. "High-Skill Migration, Multinational Companies, and the Location of Economic Activity," Working Paper 19-20, Federal Reserve Bank of Richmond.
    14. Cem Ozguzel, 2019. "Essays on migration and productivity [Essais sur les migrations et la productivité]," PSE-Ecole d'économie de Paris (Postprint) tel-03381203, HAL.
    15. Estrella Gomez-Herrera & Bertin Martens & Frank Muller-Langer, 2017. "Trade, competition and welfare in global online labour markets: A "gig economy" case study," JRC Working Papers on Digital Economy 2017-05, Joint Research Centre.

    More about this item

    Keywords

    High-skill immigration; H-1B visas; India; computer scientists; IT sector;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cgd:wpaper:460. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publications Manager (email available below). General contact details of provider: https://edirc.repec.org/data/cgdevus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.