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Executive SummaryThe rising importance of information technology (IT) occupations in the US economy has been accompanied by an expansion in the representation of high-skill, foreign-born IT workers. To illustrate, the share of the foreign born in IT occupations increased from about 15.5% to about 31.5% between 1993 and 2010, with this increased representation particularly marked among those younger than 45. This analysis focuses on understanding the role that US higher education and immigration policy plays in this transformation. A degree from a US college/ university is an important pathway to participation in the US IT labor market, and the foreign born who obtain US degree credentials are particularly likely to remain in the United States. Many workers from abroad, including countries like India and China where wages in IT fields lag those in the United States, receive a substantial return to finding employment in the United States, even as temporary work visa policies may limit their entry. Limits on temporary work visas, which are particularly binding for those educated abroad, likely increase the attractiveness of degree attainment from US colleges and universities as a pathway to explore opportunities in the US labor market in IT.
I analyze how visa policies affect international students' transition to the U.S. labor market. The Optional Practical Training (OPT) program permits international students to work via a student visa for a limited period after graduation before obtaining a work visa—an uncertain process due to the binding visa cap. I find that the extension in the length of OPT terms for students in science, technology, engineering, and mathematics (STEM) increases their likelihood of initially staying in the United States and using OPT. This result suggests that uncertainties about obtaining work visas hinder international STEM students' participation in the U.S. labor market. (JEL J61, K37, I23).
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