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October 30, 2008

TPI Study to Examine Fiscal Benefits of Highly Skilled Immigrants

 Washington D.C.-The Technology Policy Institute announced today a new research project that will delineate the budget and economic benefits provided by highly skilled immigrants working in the United States.  TPI's research will be underwritten by a grant from the Ewing Marion Kauffman Foundation, the largest private-sector funding source for economic research in the United States.

"We hope this research on the fiscal benefits of highly skilled immigrants will inform the ongoing debate over comprehensive immigration reform that is likely in the next Congress," said TPI President Thomas Lenard.  "We thank the Kauffman Foundation for supporting this project." 

"Most economists agree that admitting workers with a science, technology, engineering or mathematics background produces major benefits for the U.S. economy, but the positive effect on the federal budget-and possibly state and local budgets as well-is less well understood," said TPI Senior Fellow Arlene Holen, who will direct the high-skilled immigration project. 

The Congressional Budget Office has found immigration overall has a favorable fiscal effect at the federal level, making it likely that highly skilled workers generate an even larger net impact because they pay more in taxes than do lower-skilled workers and are less likely to receive public benefits.  However, the results of the CBO analyses have not been fully explained or analyzed. More important, "The positive fiscal impact of highly skilled immigrants has not reached the broad audience that it deserves," Lenard said.  "Given the intense focus on budget scoring, legislation that increases U.S. revenue is popular on Capitol Hill because such bills can be used to offset the costs of other proposals," Holen noted.  

High-skilled immigrants can enter the U.S. labor force by obtaining either the highly desirable employment green card that allows the worker to stay in the United States as a permanent resident or an H-1B visa, which only allows the worker to remain in this country for a maximum of six years.  Approximately 60,000 immigrant workers annually receive a green card and there is a five-year backlog. H-1B visas are also subject to stringent caps.  As a result, thousands of workers and students with scientific and technical backgrounds who want to stay in the United States are forced every year to return home.  "This loss of human resources imposes significant costs on the U.S. economy and constitutes a drain on federal revenues," Holen said.

The study will examine the economic effects of high-skilled immigration, including the impact on labor markets and economic growth as well as the effects on entrepreneurship and technology start-ups. It will also study the budget and economic effects of highly skilled workers and students returning home because of the constraints imposed by the current green-card system and determine the benefits of increasing the number of green cards to workers with backgrounds in science, technology, engineering or mathematics.      

"The Kauffman Foundation has funded studies that look at the significant contributions immigrant entrepreneurs make to the U.S. economy and related policy implications, and we are eager to learn what TPI's study will show us about high-skilled immigrant workers," said Robert E. Litan, vice president of Research & Policy, Kauffman Foundation. "U.S. policymakers must learn all they can about where economic growth comes from in our country."

The Technology Policy Institute

The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. TPI produces independent, rigorous research and sponsors educational programs and conferences on major issues affecting information technology and communications policy. TPI is a 501(c)(3) research and educational organization.  More information is available at http://www.techpolicyinstitute.org/

The Ewing Marion Kauffman Foundation

The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that works with partners to advance entrepreneurship in America and improve the education of children and youth. Founded by late entrepreneur and philanthropist Ewing Marion Kauffman, the Foundation is based in Kansas City, Mo. More information is available at www.kauffman.org.

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