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In either the short or long term, does the H-1B visa program have the effect of reducing wages in the U.S. for U.S. citizens?

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The program would increase the supply of labor to those specific sectors. As a result more foreign people would get into the sectors bidding the price down (lowering the wage). In addition, some Americans would not be able to get hired, that otherwise would have.

In addition, companies would become more profitable so more companies would be started and the reduced labor costs would be visible in other sectors, increasing labor demand elsewhere.

In the very long run free movement of labor is at least in theory more efficient than restricted movement, as people will more efficiently be able to navigate to the most efficient job locations available.

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This is from Wikipedia. The US H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as in architecture, engineering, mathematics, science, and medicine.

Assuming the hiring process is competitive, the wages must as well be competitive. But data may say the opposite in a well rounded econometric model.

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  • $\begingroup$ The question is the effect on U.S. citizen wages. So would the competitive wage be higher in a world without a H-1B program? I don't understand how your answer addresses that. If the question was unclear I would appreciate suggestions about how to make it clearer. $\endgroup$ – psr Dec 4 '15 at 21:32
  • $\begingroup$ If hiring process is competitive and this type of visa is issued for the persons with the above qualifications and specialisations, I doubt the the program will have any effect on US citizen's wages. If anything, the wages may increase instead as demand for highly skilled employees has always been trending upwards. $\endgroup$ – london Dec 5 '15 at 15:52

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