[HN Gopher] The role of high-skilled foreign labor in startup pe...
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The role of high-skilled foreign labor in startup performance
Author : Bostonian
Score : 77 points
Date : 2021-08-23 15:00 UTC (8 hours ago)
(HTM) web link (papers.ssrn.com)
(TXT) w3m dump (papers.ssrn.com)
| vsskanth wrote:
| How did they account for H1B transfers which don't go through the
| annual numerical limit ?
| orange_joe wrote:
| This paper seems to suffer from selection bias, as the examine
| the a large universe of VC backed companies. Not all VC companies
| can afford H1-B employees and this implies that only better
| funded companies are more likely to succeed. There's a vast
| difference in amount of funding a VC backed startup can raise, so
| it doesn't really make sense to compare a company that raised
| 100K through YC and a pre-IPO unicorn. The paper didn't seem to
| control for this when I looked through the first few pages.
| shalmanese wrote:
| The paper uses the H1B lottery process as the randomization so
| there's no selection bias. All the companies studied applied
| for H1B employees, just some got approval and others got
| rejected at random by the lottery.
|
| > In our sample of VC-backed startups, we observe that winning
| more H-1B visa lotteries enhances startup performance.
| Specifically, a one-standard-deviation increase in the
| likelihood of winning an H-1B visa lottery increases the number
| of VC financing rounds in the three years after the lottery by
| 7.1%, the number of patents filed by 6.2%, the number of claims
| per patent by 9.7%, and the likelihood of an IPO by 8.8%.
| rightbyte wrote:
| Ye the authors are taking correlation for causality big time.
| It is just a bad paper, judging from the abstract.
| bjornsing wrote:
| What? This is one of few papers I've ever seen (on this kind)
| that can make a causal claim. The visa lottery essentially
| makes it a Randomized Controlled Trial (RCT), the gold
| standard of science.
| wins32767 wrote:
| It's randomly controlled within startups that apply to
| sponsor visas. That implies some level of initial success
| since visa sponsorship is a huge pain in the ass.
| thunkshift1 wrote:
| Did you read the paper or just the abstract?
| Bostonian wrote:
| paper available at
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3459001
| dang wrote:
| In that case maybe we should just put that URL at the top?
|
| I've changed to that from https://www.sciencedirect.com/science
| /article/abs/pii/S03044..., which doesn't give access to the
| paper.
| RcouF1uZ4gsC wrote:
| Practice that reduces wages for labor makes business more
| profitable.
|
| That is an entirely different question than if that is better on
| the whole for society.
| darth_avocado wrote:
| I know there is a substantial pool of companies that uses the
| "consulting" formula and brings in cheap H1B labor, but H1B is
| a very broad Umbrella that also includes very highly skilled
| workers (with PhDs), doctors, etc.
|
| I'm a hiring manager in one of the big tech companies and let
| me tell you, H1B labor is NOT cheap. We not only have to pay
| them market rates, but a lot of foreign nationals with
| specialized skills are getting paid more than market average
| (it's part of the process that DOL enforces to make sure we
| don't abuse H1B). I think the study references "startups", so
| there is a chance that it is biased, but within that bias,
| accurate.
| treyfitty wrote:
| Look at credit card or marginalized finance departments. They
| get around the "we must pay market rates for H1B" by
| depressing the wages for the rest of their employees, thereby
| justifying the "market rate." - AmEx - Mastercard - JPMorgan
| - Citi
|
| H1B Labor might not be cheap if you're truly innovating, but
| let me tell you- there's a reason why credit card companies
| pay so little across the board, and it's no coincidence that
| they rely heavily on H1B labor.
| walshemj wrote:
| But most are not theirs a difference between a transplant
| surgeon with a PHD and some one whos ground out a CS degree
| and memorized a lot of leet code.
| sg47 wrote:
| But you get to retain them for longer since the switching
| cost is high.
| linksnapzz wrote:
| An entirely different question that HN would prefer not be
| asked...
| dang wrote:
| Please don't post unsubstantive comments here. HN has
| discussed this question frequently and at length for many
| years.
|
| (Often not very well, but this is the internet, and that's a
| different issue.)
| commandlinefan wrote:
| I've spent the entirety of my 30-year programming career
| working with mostly (> 90%) foreign labor. The "skills" in
| question (that I have as well)... don't seem _that_ hard to
| acquire. Yet I believe the employers when they say they
| literally can 't find Americans who have them. Either I'm
| seriously underestimating how hard it is to acquire said
| skills (and by extension undervaluing myself, by a lot), or
| there's something else going on.
| [deleted]
| kesselvon wrote:
| H1B labor isn't mobile, so you can underpay and treat them
| how you like.
|
| It's like when manufacturing complains about labor and
| skill shortages but the wages are terrible. When you need
| labor and can't find it, lots of times its just that
| employers aren't meeting the market rate for said labor.
| Hence their desire to get it on the cheap via importation
| or outsourcing.
| darth_avocado wrote:
| That is actually not true. SOME H1B labor isn't mobile
| (mostly people outsourcing firms), but people on H1B
| change jobs whenever they like. At least that's the norm
| in tech industry.
| sg47 wrote:
| That's not at all true. People on H1B cannot change jobs
| easily. They have to go through the visa transfer process
| and hope nothing goes wrong with the process. They have
| to make sure their current employer does not get wind of
| the job change and doesn't fire them during the transfer
| process. They have to ensure that the new employer can
| process their green card application. Lots of nuances
| involved. It's a serious source of stress for a lot of
| highly skilled H1B engineers
| vsskanth wrote:
| My guess - Americans with relevant skills already have jobs
| they like and are in high demand, and the ones who can up
| skill into programming positions are probably working all
| the time just to survive.
|
| Foreign workers usually already have a relevant degree or
| experience (knowing atleast the basics) and don't have as
| much student debt.
| frozenport wrote:
| >> with mostly (> 90%) foreign labor
|
| This number is too high, even if you include 1st and 2nd
| generation immigrants who have greencards/citizenship. Did
| you work for a company that underpaid its employees by only
| hiring foreigners?
| commandlinefan wrote:
| Ten in a row, apparently.
| black_13 wrote:
| Think about how badly cotton plantations needed chattel slavery.
| danbmil99 wrote:
| I suspect more than compensation, another strong Factor would be
| the difficulty or possibly the cultural tendency not to change
| jobs as often with an H-1B.
| nickff wrote:
| There are probably many differences between H1B and US Citizen
| employees; I doubt that anyone would be able to disentangle all
| of them.
| vsskanth wrote:
| Wish I could read the paper without having to make an account
| [deleted]
| Bostonian wrote:
| The SSRN link I posted lets you open the pdf even when browsing
| incognito.
| vsskanth wrote:
| Didn't work in kiwi browser but worked in Firefox Mobile for
| me. Thanks.
| vsskanth wrote:
| Points to a bigger problem. Imagine how many startups simply
| don't come into existence because the founders are stuck on life
| long H1B visas.
|
| Or many times the founders simply can't even make it into the US
| even though they have much needed skills.
|
| Skilled immigration into the US is much harder and way more
| uncertain than other nations. Massive amounts of paperwork (so
| much that you need a lawyer), lotteries, long wait times and in
| the end highly dependent on whichever immigration officer sees
| your application.
| akomtu wrote:
| I know it's going to be unpopular here, but can those H1Bs go
| to the southern border, claim asylum and get fasttracked to GC
| without questions asked?
| ptudan wrote:
| I don't think claiming asylum and no questions asked go hand
| in hand. There are many forms and approvals.
| secondaryacct wrote:
| Yeah it's so weird - Im French, I emigrated to Hong Kong with
| literally no effort and will be permanent soon, I know I could
| go to Singapore, Taiwan, maybe Japan with ease and a good
| sponsor, or China with difficulty with a very good sponsor.
|
| I think Canada is an english test away, Australia should be not
| too hard.
|
| The US: just the whole thing stresses me. I d rather stay in
| Hong Kong forever than move to the US with all their weird
| paperwork, conditions etc. They dont want me, I wont insist :D
| triceratops wrote:
| > I think Canada is an english test away
|
| Or French test.
| belval wrote:
| It's actually better if you have both because of the point
| system. If the author has both + is considered skilled
| labor it should be pretty easy to get in.
| bserge wrote:
| So, you haven't even looked at the requirements. The US ain't
| easy to get to, but it's no China. Easier than Australia,
| actually.
| [deleted]
| whoisburbansky wrote:
| If you're French, sure, easy enough.
| [deleted]
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