The Talent Drain
Monday, 16 July 2012
America pays to educate thousands of international students in critical fields. Then immigration policies make it hard for them to stay.
At a time when the global demand for advanced degree holders is rising, the United States sends an estimated 50,000 educated workers out of the country every year. This is the result of the stringent caps on temporary employment visas that have been in effect for 45 years and equally stringent caps on permanent visas that are 20 years old. As a result, the U.S. economy is losing some of the world’s brightest minds. It is also losing the benefits of billions of dollars spent on student grants that could generate returns for this country.
The bitter truth is that the U.S. has not been able to fully tap the pool of foreign talent educated here, while other developed countries are trying to take full advantage. Each year, Canada, Australia, and the UK provide more than 60 percent of their permanent visas on an employment basis. The U.S. provides only 15 percent of its green cards on this basis.
The global demand for science, technology, engineering, and mathematics (STEM) graduates has been on the rise ever since countries realized the importance of technology and innovation to the growth of their economies. In response, there has been a surge in the number of students travelling to developed countries to receive advanced degrees in these fields. According to the International Institute of Education, in academic year 2010-11, 36.4 percent of the total international students in the U.S. were in STEM fields, reflecting a 16.1 percent increase from the previous year.
Foreign-born students are flocking to STEM programs in the U.S. at the same time that American students are losing interest. The number of non-U.S. citizens receiving doctorates in science and engineering increased by 44 percent from 2002 to 2006, the latest dates for which numbers are available. This is six times higher than the growth rate for U.S. citizens during the same period.
Despite the strong demand for STEM workers, as demonstrated through their comparatively higher wages, the supply of American workers in these fields remains constrained. According to the 2008 Census, 12 percent of all employed workers and 17 percent of all the STEM professionals in the country were foreign-born.
Among the reasons for the inadequate supply of U.S. domestic labor in STEM fields are failings in the U.S. education system. According to a study by the Government Accountability Office, about 40 percent of the students who failed to complete STEM degrees in college said they had faced problems related to poor high school science and mathematics preparation. They also reported problems with teacher quality. Students lost interest in mathematics and science when teachers failed to explain the subject matter effectively. Making matters worse, many American STEM graduates don’t stay in STEM professions. According to a report from the Georgetown University for Education and the Workforce, only 56 percent of STEM bachelor’s and advanced-degree holders are likely to work in the same field after graduation. This rate drops to 46 percent after 10 years. One possible reason behind this career migration is that highly educated and skilled STEM workers get paid more in health care and managerial professions.
Research and development has always been an underlying factor of growth of the U.S. economy. And the government has been funding the lion’s share of it. In 2009, R&D work by colleges and universities constituted 53 percent of all basic research conducted in the country. Of the $55 billion spent on college- and university-based R&D, $33.5 billion was federally financed.
A small chunk of this federal money goes to grants and fellowships—$811 million in 2009. Graduate students in STEM fields mostly finance their education with the help of the resulting research assistantships, teaching assistantships, and grants. In 2009, 40.5 percent of STEM doctorate recipients were international. Almost all of them depended on assistantships and grants.
The investment is worth it. According to a recent report by the American Enterprise Institute and the Partnership for a New American Economy, 76 percent of the patents from the top 10 patent-generating U.S. universities in 2011 had foreign-born inventors. Of these patents, 99 percent were in STEM fields. The report also says that each foreign-born graduate with an advanced degree from a U.S. university who works in the U.S. in a STEM field creates, on average, 2.62 American jobs.
Although foreign students have been contributing immensely to the growth of the U.S. economy, it is not easy for these immigrants to stay after completing their studies. Every year, the government issues 65,000 standard employment or H-1B visas. These visas are available to all international students in the U.S. regardless of their area of study. An additional 20,000 are set aside for people with a master’s degree or higher from an American university. The H-1B visas that allow the student to remain are filed by the employer on the employee’s behalf and involve financial and legal obligations.
International students do have some temporary leeway. After graduation, they can opt to take what the government calls Optional Practical Training. Under this program, non-STEM graduates can stay in the U.S. for up to 12 months after they leave school. STEM graduates can stay up to 29 months.
The number of available visas is a drop in the bucket compared to the volume of people seeking them. Petitions for H-1B visas are accepted from April 2, and they reach the cap well ahead of time. For Fiscal Year 2013, enough petitions were filed to reach the cap by June 11.
Not all foreign-born students are top flight. But the sheer quantity of international students suggests that valuable talent is leaving our shores after graduation. According to economist Arlene Holen of the Technology Policy Institute, in the five-year period ending in 2007, nearly 450,000 international students graduated from American colleges and universities. This includes 255,267 holders of master’s degrees and 49,532 new PhDs.
The problems don’t stop for STEM graduates trying to stay in the U.S. when they get the H-1B visa. The temporary employment visa is valid for three years, with the possibility to extend it to a maximum of six years. After that, they are allowed to stay only through an employment-based green card. This can take years to process, so foreign-born STEM graduates need to apply well in advance. And the competition is intense. The total number of employment-based green cards allotted at present is 140,000 for all categories of applicants—not just American-educated STEM workers.
Other countries are changing their immigration policies to attract foreign talents. The Chinese government has introduced a program under which Chinese scientists who move home from abroad can get free housing, a bonus of 1 million yuan (more than $157,000) and, in some cases, a prestigious academic title attached to their name.
Much of the boom in the American economy in recent decades has been fueled by advances in high-tech. Research shows that between 1995 and 2005, foreign-born STEM workers founded half of the firms in Silicon Valley.
In this context, during an Internet conference in 2008, venture capitalist John Doer said: “I would staple a green card to the diploma of anyone that graduates with a degree in the physical sciences or engineering in the U.S.”
And the late Steve Jobs, founder of Apple, always stressed the need for more trained engineers. He suggested that any foreign student who earned an engineering degree in the U.S. should be given a visa to stay in the country.
Time and again, economists have warned against the effects of sending bright minds away after funding their studies and awarding them degrees from U.S. institutions. Given how much the U.S. has already invested in these students, and their high potential to contribute to the economy, it would be sensible for the U.S. to tap into their talents. To do this, our immigration policy needs reform.
The U.S. economy is “Held Back By Our Labor Force”: how a lack of highly skilled workers is hurting our competitiveness in the global market.