Foreign-born students who obtain Ph.D.s in the U.S. are less likely to work at start-ups after graduation due to concerns about obtaining requisite visas.
A new study — “Why Foreign STEM Ph.D.s Are Unlikely to Work for U.S. Technology Startups,” co-authored by researchers at Cornell University and the University of California San Diego — finds that foreign-born STEM Ph.D. graduates are offered positions at start-ups at roughly the same rate as U.S. citizens. Few, however, choose such jobs, opting instead to work at large technology companies with the resources and experience to sponsor foreign workers for highly coveted H-1B or permanent residency visas.
The study — published in the Proceedings of the National Academy of Sciences — states that current U.S. visa policies are an obstacle for small companies seeking to hire foreign workers for highly-specialized skills. Moreover, the policies create an uneven playing field.
The study did not parse out foreign students by ethnicity. But Indian nationals constitute the bulk of applicants for H-1B visas; 65,000 H-1B visas are meted out each year, with an additional 20,000 reserved for those who received an advanced degree in the U.S.
“Start-ups are an important engine for innovation and economic growth,” said Michael Roach, assistant professor, Charles H. Dyson School of Applied Economics and Management at Cornell.
“A key insight from this research is that rather than fostering entrepreneurial activity, U.S. visa policies may disadvantage young technology start-ups – and this applies to start-ups founded by immigrants and U.S. citizens alike. But hiring is one of the key challenges for early-stage technology start-ups, and current U.S. visa policies make it even harder,” he said.
“The findings of this study suggest the need to consider immigration policies that make it easier for technology start-ups to hire highly skilled foreign workers with Ph.D.s from U.S. research universities,” said Roach. “We may want to consider ways to make it easier for high-growth startups to hire the workers they need.”
Co-author John Skrentny, a professor of sociology at UC San Diego and director of the university’s Yankelovich Center for Social Science Research, said: “Over the past few decades, the American economy has become more dependent on science and technology innovation for growth, and at the same time, our science and technology Ph.D. programs have become more dependent on foreign talent.”
“We often see great innovations coming from Google and Apple, but a lot of their innovation is actually from buying start-ups,” Skrentny said. “These start-ups have trouble accessing the foreign talent our best universities are graduating.”
Nearly 16 percent of Ph.D.s who are U.S. citizens worked at start-ups after graduation, compared with nearly seven percent of foreign Ph.D.s who required a work visa.
The survey began in 2010 and focused on Ph.D. students in STEM fields at 39 leading U.S. research universities.
The study considered whether international graduates were more risk-averse than U.S. citizens, indicating that, despite their interest, they’d ultimately be more inclined to work for larger, more stable companies, but the survey also showed foreign-born Ph.D.s had a greater tolerance for risk.
Studies have shown that start-ups pay lower salaries to their employees than established companies in exchange for equity, but the researchers also found in the survey that foreign-born Ph.D.s rated high pay as less important to their ideal job than their U.S. citizen counterparts.
The research was supported by the National Science Foundation, the Ewing Marion Kauffman Foundation Junior Faculty Fellowship and the Alfred P. Sloan Foundation.