H-1B Visa Restrictions Likely To Result in Offshoring More Jobs; How is Canada, India and China Benefited? - Report!  

US President Donald Trump’s restrictions on high skilled H-1B workers was criticized all over the world. Instead of increasing employment for American workers amid the visa ban, this is causing US multinationals to switch jobs offshore, especially in countries like India, Canada, and China.   

Following the restrictions by the United States on skilled immigration are likely to result in more offshoring of jobs. This statement made headlines after a research paper's report went viral. 

According to an Economic Times report, the National Bureau of Economic Research paper took note of data on visas issued by the US government and pointed out its effect on activities of multinational companies. The research paper was titled as - How Do Restrictions on High-Skilled Immigration Affect Offshoring? 

Meanwhile, the evidence from the H-1B visa program – by Wharton School’s Britta Glennon found that, rather than increase employment of natives, restrictive migration policies led to offshoring of jobs. After the ban was issued, several IT firms and industry associations such as Nasscom have criticised Trump’s move to temporarily suspending non-immigrant visas. 

Currently, the United States is facing the biggest unemployment crisis due to the Covid-19 pandemic. Assistant Professor at the Wharton School of Business, Glennon focused on visa restrictions resulting in an increase in high-skilled foreign affiliate employment and an increase in the likelihood of opening foreign affiliates in new countries, ET further reported.

Also, this is the first research paper to use a matched firm-level data set, according to Glennon. 

“The findings of the paper have important policy implications; the offshoring of jobs appears to be an unforeseen consequence of restricting skilled immigration flows. Even if H-1B immigrants displace some native workers, any policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad,” Glennon said in the paper. 

Looking into the H-1B petition filings, Indians accounted for 69 percent of the H-1B petition filings in 2017 (and Indians and Chinese, 85 percent). Meanwhile, the study states that there would be large increases in foreign affiliate employment in India and China. Whereas, Canada, it is the other beneficiary in this matter because of less/no high-skilled immigration policies and geographic proximity to the US.