High-Skilled Temporary Immigrants in a Segmented Labor Market: A Study of H-1Bs

Renee Reichl, University of California, Los Angeles

Prior work demonstrates that skilled immigrants to the U.S. (H-1Bs) are paid the prevailing wage, yet they continue to be recruited despite unemployment and wage stagnation in H-1B sectors. I broaden the debate on the impact of skilled immigration by examining the relationship between recently arrived immigrant status and two crucial labor market dimensions: contingent employment and eligibility for employer-subsidized healthcare and retirement benefits. In addition, simultaneous equation modeling is utilized to assess the possibility of differing wage models for contingent and core workers in H-1B industries. I argue that the flow of skilled immigrants to the US is better understood in terms of the broader advantages they provide: flexible labor, the most recent skills, and lower expectations in terms of work conditions and benefits. Findings support former conclusions that H-1Bs are not “cheap labor;” rather, this study shows that they are instead utilized as flexible labor.