Indian workers get lesser wage premium in U.S: Study

A new working paper by the Center for Growth and Opportunity, a university-based academic research center in Utah has revealed that Indian workers get less wage premium compared to other English speaking countries in the U.S.

Omid Bagheri, assistant professor of Economics at the Kent State University at Salem (Oregon) who authored the study rejected the notion that American Companies hire foreign students as they are cheap and said it is lack of skills that leads the U.S companies to opt for foreign work force instead of the U.S citizens.

The study estimated that typically, skilled immigrants with temporary work visas get 29.5% wage premium compared to natives. The findings also showed a significant decline in the wage premium from 2010 to 2017.

Bagheri found that the lesser supply of skilled workers and higher demand for them lead companies to pay “significant premiums to hire foreign workers.”

“The immigrants’ wage premium that we found in this study might suggest that the demand for these workers outweighs the supply,” the author noted.

The findings support easing of immigration rules for foreign workers as it found that hiring them would boost the US economy and even prevent companies from moving jobs overseas. It further suggested that the US needs to encourage native-born workers to pursue training and education that meet the needs of its labour market.

Last week, Appeasing many U.S tech firms, Biden administration had allowed the Trump-era immigration rule, which banned overseas workers visas including H-1B, to lapse by deciding not to renew it.