Rethinking Immigration Policy for the Future of the American STEM Workforce
Kathryn Brink, Shubham Tripathi, Ankita Arora, Christopher Jackson, Adria Schwarber, and Melody Tan
Background
Recovery from the ongoing COVID-19 pandemic presents an opportunity for necessary reforms to the US immigration system that can strengthen US resilience to future crises. In the context of growing anti-immigrant sentiments and economic uncertainties exacerbated by the pandemic¹, immigration policies that strengthen the recruitment and retention of immigrants working in the fields of science, technology, engineering, math, and medicine (STEM) are particularly important. Timely action on this issue is critical as healthcare workers, scientists, and entrepreneurs play key roles in pandemic response, workforce recovery, and preparedness for future crises.
One avenue towards improving foreign talent retention is to implement immigration policies that enable international graduate students educated in the US to remain in the American workforce post-graduation. Such changes would allow the US to benefit from the technical and cultural competencies of international students, enhancing American scientific advancement and innovation and stimulating our economy². International graduate student researchers in STEM are a critical part of the US higher education community and long-term workforce. Along with facilitating important cultural connections, international scholars are key drivers of scientific innovation, with 76% of patents from the top ten patent-producing American universities including at least one foreign-born inventor in 2011³. During their studies, international students contribute $45 billion annually to the US economy, and after graduation, many continue to contribute to US science and technology⁴.
Yet, the inefficiencies and the uncertainty inherent in current immigration policies have contributed to a persistent decline in international student enrollment at institutes of higher education⁵. A 2019 study of international applicants to graduate education programs in physics found that 85% of students who chose to come to the US experienced visa delays⁶. Of the students who chose not to come to the US, 32% reported perceiving the US as unwelcoming to foreigners and 20% believed they would have better long-term employment opportunities outside of the US⁶. Unlike many of its peer countries, the US does not offer any direct pathways from a student visa to employment, residency, or citizenship. By contrast, Canada, Germany, and France have implemented streamlined immigration policies aimed at reducing visa-related uncertainties and facilitating international student retention post-graduation⁷ ⁸ ⁹. These challenges are not new. In 2016, the US ranked 21st among 24 OECD member countries for employment-based permanent immigration¹⁰.
In response to the COVID-19 pandemic, the Trump administration proposed several changes to the F-1¹¹ and H-1B visa programs¹². These changes were purportedly aimed at reducing unemployment for US citizens and permanent residents. However, they also created uncertainty for visa holders and for individuals intending to study and work in the US regarding the validity and duration of their legal immigration status. More recently, the Biden administration proposed broad reforms to promote the retention of foreign graduate students and researchers from all countries¹³. These frequent policy reversals with changeovers in administration may reduce the appeal of the US as a destination for STEM students, with possible long-term consequences for the ability of the US to recruit and retain foreign talent.
At the same time, the COVID-19 pandemic has highlighted the contributions of researchers and medical professionals to the US emergency response. Immigrants support economic recovery¹⁴ ¹⁵, and can help foster international cooperation in times of global crises¹⁶. Yet, the COVID-19 pandemic has amplified anti-immigration sentiments and economic uncertainties, with possible long-term consequences for international student retention.
In this brief, we discuss measures that Congress could take to recruit and retain US-educated, international STEM graduate student talent in the US workforce. These policy options are: 1) take no additional action and maintain the status quo, 2) enact H-1B lottery system reforms, 3) create new visa categories, and 4) create a state-sponsored visa program.
Option 1: Status quo
The current structure for international student immigration to the US is complex, without a streamlined path from a student visa to a work visa or to permanent residency. Foreign nationals who wish to study at US institutes of higher education typically apply for an F-1 visa. F-1 visas are temporary visas that require applicants to provide evidence of ‘nonimmigrant intent’, confirming that they will not remain in the US after their period of study. After completing their studies, F-1 visa holders are eligible to obtain temporary employment in a field related to their field of study through Optional Practical Training (OPT). This employment can extend up to 36 months for STEM graduates, during which the student’s F-1 visa continues to be sponsored by their university or college.
After OPT, 80–90% of F-1 visa holders who remain in the US transition to an H-1B temporary work visa¹⁷, which is initially valid for three years and can be extended for a maximum of six years. H-1B visas are employer-sponsored and allotted via a lottery subject to statutory visa caps. The first 65,000 visas are allocated among a pool of all foreign nationals, and a subsequent 20,000 H-1B visas are reserved for US-educated graduate students. Employees of universities and non-profit or government research organizations are exempt from these statutory caps. Unlike F-1 visas, H-1B visas are dual-intent, which enables H-1B visa holders to apply for permanent residency.
International students face substantial uncertainty throughout the immigration process, including abrupt changes in the validity of their immigration status. Through the Immigration and Nationality Act, Congress granted the executive branch the authority to deny foreign visa holders entry to the US, effectively allowing the president broad discretion over immigration policy¹⁸. This creates uncertainty for students seeking educational and employment opportunities in the US and allows an administration to enact policies targeting particular countries. While this control could be important for national security, it can also lead to policies that single out immigrants based on race, religion, or ethnicity. For instance, the Trump administration used its executive authority to implement restrictions on immigrants from Muslim-majority countries¹⁹ and on Chinese students and researchers²⁰.
Current immigration policies do not prioritize the integration of US-educated international students into the workforce. Specifically, the requirement for student visa applicants to prove nonimmigrant intent conflicts with the goal of retaining US-trained STEM professionals post-graduation. In addition, on average, there are three times as many H-1B applicants as there are visas available²¹ ²² ²³. As a result, international students may need to submit multiple H-1B applications during their OPT training period and may still not receive an H-1B visa pending lottery outcomes.
Overall, the current US immigration system lacks a long-term, cohesive strategy for retaining US-educated international graduate students, which negatively affects innovation and the economy. The repercussions of these immigration policies are compounded by their effects on graduate student enrollment, which has declined 5% since its peak in 2015–2016²⁴. By decreasing the accessibility of post-graduation employment opportunities, current immigration policies may discourage international students from applying to US graduate programs. For example, 85% of international applicants to graduate programs in physics indicated that they would be more likely to apply to a graduate program if the host country provides options to stay and work after graduation⁶. International graduate student enrollment in turn affects innovation, with one study finding that a 10% increase in international graduate students would increase patent applications by 4.5%²⁵.
From an economic perspective, immigrants with postgraduate degrees each contribute approximately $427,000 to $654,000 to federal, state, and local governments over the course of their lives²⁶. Given that 72% of foreign doctorate recipients were still in the United States 10 years after receiving their degrees²⁷, the combined loss of over 20,000 international graduate students due to enrollment declines since 2015–2016²⁴ likely represents a long-term loss of billions of dollars in government revenue alone. Low graduate student retention also reduces job creation, given that every 100 additional US-educated foreign workers with advanced STEM degrees is associated with 262 more jobs for US-born workers²⁸. Together, the direct effects of current policies on international graduate student retention and their indirect effects on international graduate student enrollment create substantial opportunity costs to the US economy and innovation.
Option 2: H-1B lottery system reforms
While the H-1B visa program is not exclusively designed for STEM workers, these individuals represent a disproportionate share of visa recipients, likely due to high demand for these workers from US companies²⁹. The H-1B visa is one of the primary means of bringing skilled immigrants to the US; however, the existing lottery system offers policymakers little control over the distribution of H-1B visas beyond those reserved for US degree holders. The lack of flexibility in the H-1B visa distribution system limits the ability of the US to retain foreign talent to fill jobs in STEM fields where additional labor is most needed. In addition, the uncertainty inherent in the lottery system inhibits the ability of the US to recruit and retain STEM workers, for many of whom the H-1B visa is a stepping stone to permanent residency.
H-1B reform remains an ongoing area of debate and litigation. In June 2020, the Trump administration issued Proclamation 10014, suspending the entry of H-1B visa holders through the end of the year¹². In October 2020, the Trump administration published new rules governing H-1B visas, including a revised definition of the term ‘specialty occupation’³⁰. This was soon vacated by a federal court³¹. In January 2021, the Department of Homeland Security released a final rule replacing the H-1B lottery with a wage-based selection process beginning March 2021³². The Biden administration delayed the implementation of this rule to 2022³³ and the rule is currently being challenged in federal court³⁴. These are just some examples reflecting a continuous churn in visa rules that introduce uncertainty into the immigration process³⁵. Other federal legislation proposes to reduce alleged fraud and abuse within visa programs such as H-1B by enforcing stricter requirements for the recruitment of international workers³⁶ ³⁷ ³⁸.
Congress should use its authority to modify the H-1B visa cap each year to reflect the dynamic needs of the US, taking into account factors such as employment levels, economic growth, and the needs of key sectors. The present cap, unchanged since 2006³⁹, fails to account for continuous changes in the US economic landscape. The H-1B visa allotment process could also prioritize applicants with advanced STEM degrees from US institutions beyond the 20,000 visas currently reserved for US graduate degree holders. Similar changes have been proposed in bipartisan legislation such as the H-1B and L-1 Visa Reform Act of 2020³⁶ ³⁷. While critics argue that increasing the H-1B visa cap could result in wage depression for American workers, recent studies have shown no evidence of this effect⁴⁰. Prioritizing immigrants with advanced STEM degrees could reduce the likelihood that applicants with Bachelor’s degrees receive visas⁴¹. However, increased control over the lottery process could allow policymakers to mitigate these issues as they arise.
The H-1B lottery system could alternatively be moved to a hybrid system, where applicants are first classified based on the following priorities: 1) an advanced degree in STEM from a US institution, 2) graduates of any other advanced degree program, 3) median wages adjusted to skill level, and 4) whether the applicant’s job is in an field facing a labor shortage. A similar priority list is proposed in the H-1B and L-1 Visa Reform Act of 2020³⁶ ³⁷. Each classification could then have its quota fulfilled through a lottery while keeping the total number of H-1B visas allotted the same. This system allows for the redistribution of quotas depending on the current needs of the economy, introducing flexibility into the currently rigid system.
Finally, the US could implement a points-based merit system where applicants that score higher are prioritized during the H-1B allocation process. For example, the UK implemented a points-based immigration system in January 2021 with salary and skill thresholds that are flexible based on individual applications⁴². Conservative leaders in the US have supported adopting a merit-based system of immigration following the immigration path currently used by Canada and Australia⁴³ ⁴⁴. A study by the Pew Research Center shows that more than three-quarters of US adults support high-skilled immigration⁴⁵. Thus, a merit‐based immigration system that simultaneously supports integration of US-educated STEM graduate students into the workforce and fosters high-skilled immigration could garner support from policymakers across the political spectrum.
Option 3: New and amended visa categories for STEM graduates
Efforts to retain international STEM student talent could include creating new, targeted work visa categories for STEM professionals or amending existing visa categories to allow dual intent. Currently, the US immigration system has nearly a dozen specialized visa categories for temporary workers, including for example, the H-2B temporary agricultural worker visa, O visa for individuals of extraordinary achievement, and P-1 visa for athletes. However, there are currently no visa options aimed specifically at retaining graduate-level STEM talent.
Creating a new, STEM-focused visa category could enable the US immigration system to prioritize recruitment and retention of talent in new or emerging areas critical to US interests. For example, a June 2020 report from the President’s Council of Advisors on Science and Technology cited a need for the US to attract and retain global talent in artificial intelligence and quantum information sciences to remain competitive in these ‘Industries of the Future’⁴⁶. Congress could use its authority to create new visa categories that allow the US to retain critical talent in emerging research and technology areas and increase flexibility in the immigration system to respond to future needs. The National Security Innovation Pathway Act⁴⁷ would have created a special immigrant visa category for individuals with critical expertise in national security-related fields including artificial intelligence, quantum information sciences, and robotics. While this bill had been endorsed by several scientific and professional societies⁴⁸ and was included in the House version of the 2021 National Defense Authorization Act⁴⁹, it failed to make it into the final version of the legislation.
Improvements to the entrepreneurial visa system could also improve international graduate student retention. Unlike other countries, including France, Canada, Australia, New Zealand and the United Kingdom⁵⁰ ⁵¹, the US has a high barrier to entry for foreign-born entrepreneurs. Entrepreneurial visas currently require significant financial investments and job creation quotas, making it difficult for applicants to qualify. Several previous policy proposals in Congress have suggested lowering the barrier to entry for entrepreneurial visas⁵⁰ to encourage entrepreneurs to stay in the US, though these bills did not make it through the legislative process. The immigration pathway for foreign-born entrepreneurs would have narrowed further under a Trump administration proposal that would have eliminated the International Entrepreneur Rule (IER), which allows immigrants with business ideas additional time to meet the high financial and employment thresholds of the existing entrepreneurial visa⁵² ⁵³. The Biden administration has since revived the IER program⁵⁴ ⁵⁵. Alternatively, rather than modifying the entrepreneurial visa, Congress could instead create a new start-up visa category to support US innovation in key areas, such as artificial intelligence and biotechnology.
Congress could also modify the more commonly-held H-1B or F-1 visas to provide a smoother path for STEM graduates to start businesses or attain permanent residence. For example, the bipartisan 2019 Startup Act⁵⁶ would allow an H-1B or F-1 visa holder to become a ‘qualified alien entrepreneur’ if the new business hires two people and invests or raises capital of $100,000 in a new business entity. The bill would also allow an individual to obtain permanent residency if the business employs an average of at least five full-time non-relative employees over the next three years⁵⁰. Similarly, Congress could amend OPT and F-1 visa programs to allow international students to claim dual intent earlier and, as a result, shorten the time to permanent residency. The Keep STEM Talent Act of 2019⁵⁷ ⁵⁸ would allow dual intent for F-1 visa holders pursuing advanced STEM degrees at US universities. The move has broad support in the scientific community⁸⁹ ⁵⁹, and an American Physical Society survey suggested that allowing F-1 visa holders to claim dual intent and providing STEM degree holders a smoother path to permanent residency would improve the attractiveness of the US as a destination for top talent⁶.
The addition of new visa categories has the potential to complicate an already complex visa system, which currently contains over a dozen unique pathways. However, creating new visa categories or introducing additional flexibility into existing visa options could enable the immigration system to retain STEM talent across critical areas and to better respond to emerging needs, such as the continuously evolving COVID-19 pandemic. Such a system also allows elected officials to support individual visa categories that could benefit industries in their districts, an approach that has previously been proposed for attracting workers in landscaping⁶⁰ and farmwork⁶¹.
Option 4: State-sponsored visa program
A state-sponsored work visa program could add flexibility to the immigration system by allowing states to tailor visa issuance to their workforce priorities. In such a system, each participating state would be able to sponsor a certain number of non-immigrant work visas based on the state population and state legislatures would determine their own selection processes for visa applicants. The Department of Homeland Security and Department of State would retain their responsibilities of carrying out background checks and issuing federal visas, respectively. State-sponsored programs have been proposed in Congress in the State Sponsored Visa Pilot Program Act of 2017⁶² and the State Sponsored Visa Pilot Program Act of 2019⁶³. The ‘Heartland Visa’ program⁶⁴, a similar proposal with more local control over work visa allocation, received the backing of then-candidate Biden⁶⁵.
The primary advantage offered by a state-sponsored visa program is that it allows states to customize the work visa program in accordance with their needs and priorities. The status quo one-size-fits-all work visa regulations often put certain states at a disadvantage. For instance, federal guidelines proposed in 2020 would have required that H-1B workers be paid in the 45th percentile of their profession³⁰. Under this rule change, large hospitals in urban centers would have been able to hire foreign physicians at increased pay levels. However, clinics in rural areas, which are facing a pressing shortage of physicians, would have been less likely to have the budget to accommodate these salary increases⁶⁶.
Currently, the federal government uses national economic indicators and unemployment numbers to set caps on the number of H-1B visas. However, such indicators can vary widely from state to state. Allowing state legislatures more jurisdiction over visa distribution, including the number of visas issued in each individual state, will enable work visa allocation to be more attuned to states’ economic needs. For example, states that lack high-tech industries could attract businesses by sponsoring visas for foreign workers that these businesses want to hire. This could drive investment in poorer states and counties, creating new jobs and increasing tax revenues for both state and local governments. Furthermore, smaller companies could advocate to their state legislatures for work visa regulations that meet their needs.
A state-sponsored work visa program would require states to set up infrastructure for processing thousands of applications, maintaining records of all individuals on state-sponsored visas, and investigating any violations of state visa regulations. This would require significant expenses on part of the state governments. However, much of this expenditure could be covered by charging visa-processing fees to applicants. Additional tax revenue from new businesses and foreign workers could also help to offset these expenditures. Furthermore, the decentralization of application processing responsibilities will likely speed up visa processing by decreasing the load on US Citizenship and Immigration Services, which is currently responsible for handling these applications and has struggled with delays⁶⁷ ⁶⁸.
Under a state-sponsored visa system, states would have the freedom to enact specific regulations for the visas that they sponsor, yet the federal government would retain the power to impose requirements on the states participating in such a program. Some of the proposed criteria could work against the interests of visa holders. For example, a provision in the State Sponsored Visa Pilot Program Act of 2019 proposed a $4,000 bond to be put up by foreign workers as a way to ensure their compliance with visa regulations⁶³. Such a bond could be prohibitively costly for workers from low-income countries. Another provision in the same bill disqualifies state-sponsored visa holders from access to means-tested welfare, a policy that would significantly disadvantage foreign workers in low-wage jobs and those experiencing temporary financial distress. The lack of access to these financial provisions would be especially challenging for immigrants during a global health or economic crisis⁶⁹ ⁷⁰. Previous legislation has also lacked protections for workers from abuses common in guest worker programs⁷¹, another aspect that has been brought to the forefront by the COVID-19 pandemic⁷² ⁷³. Finally, smaller states could perceive the population-based allocation of visas as unfair.
Previous federal proposals to establish a state-sponsored immigration system have garnered support from the US Chamber of Commerce, the Bipartisan Policy Center, and pro-immigration group FWD.us⁷⁴ ⁷⁵. Several state legislatures, including those in Colorado⁷⁶, Utah⁷⁷ ⁷⁸, Texas⁷⁹, New Mexico⁸⁰, and Oklahoma⁸¹, have already taken action towards and in support of state-sponsored visa programs. However, without significant provisions protecting foreign workers from abuse by employers, the proposal is likely to face opposition from labor and immigrants rights organizations⁷¹.
Conclusion
Immigrants have been at the forefront of the US response to the COVID-19 pandemic — including as healthcare workers in hospitals⁸² and scientists working on vaccine development⁸³. The contributions of these immigrants have played an important role in helping the US address the pandemic and have come despite a work visa system that does not prioritize their long-term retention in the US. As Congress makes significant investments in US STEM infrastructure through the United States Innovation and Competition Act⁸⁴ and the Infrastructure Investment and Jobs Act⁸⁵ ⁸⁶, it should include complementary reforms that modernize the work visa system to support economic recovery. There has long been bipartisan consensus on the importance of foreign workers to the US economy and on the need to attract immigrant talent in STEM fields to keep the US competitive in a rapidly globalizing world. However, there has been insufficient legislative action to address problems recognized by lawmakers from both sides of the aisle. This has resulted in inefficiencies, uncertainties, and roadblocks that compromise the ability of the US to attract and retain highly-trained students with STEM degrees from US institutions.
This brief highlights multiple proposed reforms to the current visa regulations that could improve the retention of US-educated international graduate student talent in STEM. The proposals range from very narrow (allowing dual-intent for F-1 visa applications) to broader efforts involving a complete overhaul of the way that H-1B visas are allocated and the creation of entirely new visa categories. Reforms to the H-1B visa lottery system and the creation of new visa categories could be implemented within the existing immigration infrastructure, which could enable the US to jumpstart economic growth as the pandemic evolves. A new visa category that makes it easier for entrepreneurs to stay in the US could help create new jobs and offset the workforce losses that the pandemic is feared to have caused⁸⁷. Over the long term, a state-sponsored work visa system could support the growth of burgeoning regional economic centers by driving job growth in regions of the country that would benefit the most from economic stimulus⁸⁸.
Modernizing immigration policies, particularly those concerning US STEM graduates, must be a priority for Congress. The US economy and research enterprise, including biomedical and national security advances, hinge on addressing the gaps in the current system.
This policy analysis was initially posted on August 17, 2021.
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