High skilled immigrants use the H-1B visa to work in the United States. Prior to 2004,...

High skilled immigrants use the H-1B visa to work in the United States. Prior to 2004, they allowed over 120000 visas to be issued each year. After 2004, they reduced the quota to 65000 immigrants per year. Discuss the implications that this change would have based on your knowledge of economic theory on a. native workers in the USA b. firm owners in the USA c. remaining workers in the destination countries d. firm owners on destination countries You may use graphical analysis if it helps illustrate your points.

Expert Solution

Implications that this change of reducing quota of H1B would have-

a-Increse in employment oppurtunities - The employment oppurtunities for thr native workers will increase as the supply of employees or workers from india will be drastically reduced.this will lead to increase in the demand of native workers in the american companies which will bring more employment oppurtunities as the supply of the skilled emoployess will be less the demand for the native employees will rise.In this condiction the the companies may increase the wages to get the best qualified employee among the native workers

b-Effect of firm owners in USA-When the H-1B cap was reduced to 65,000 after 2004, the restrictions in H-1B visas actually reduced the ability for firms to attract ‘the best and brightest’ by deterring workers with the highest earnings potential from entering the U.S. labor market. This may also effect the firms output or efficiency level as the firms will not be able to import highly skilled employees from outside America.

c-Remaining workers in destination countries-The employee remaining in destination country will have to find work or jobs in some other country and will have to work on low wages as compared to the wages that he could work in america which will have a danger impact on his career

d-Impact on firm owners on destination countries -Though Indian information technology giants such as TCS, Infosys, Wipro, HCL and others have in the past insisted that they have reduced their dependence on H-1B visas to a large extent, a reduction in the overall quota of H-1B visa workers would still mean that the number of workers they would either have to shell out more money to hire local talent or pay more to the existing H-1B work visa holders.

Rahul Sunny answered 1 year ago

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