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The US has recently issued several policy proposals that increase costs of finding a job in the US for foreigners and, especially, foreign students:
A $70,000 to $130,000 fee on students planning to use OPT (Optional Practical Training)
A $100,000 fee for a skilled immigrant (H-1B visa)
The OPT program allows international students to work for 1 year in the US, and up to 3 years if their degree is classified as science, technology, engineering or math (STEM). While international students are under OPT at a company, the company may apply for the H-1B visa on their behalf in case the company wants to keep the international worker.
These additional fees on both H-1B visa and OPT programs will heavily impact employment of foreign students in the US by making it significantly more costly. For context, the median H-1B employee earns around $130,000.
So what are the likely impacts of these two policies on the US economy?
Overall Economic Weakening
We have previously discussed the impact of restricting skilled immigration. The US already curtails skilled immigration by having a very limited number of H-1B visas available. Using the fact that currently all new H-1B employees receive the visa via lottery (at random), economists have extensively studied the impact on firms of winning and losing these lotteries.
What will be discussed below:
Summary of studies on the impact of H-1B immigrants;
What economic research says on how the new proposals will impact universities and the enrollment of local US students;
How US productivity growth is fueled by immigrants
