Admission-Group Salary Differentials in the United States: The Significance of Labor Market Institutional Selection of High-Skilled Workers.

In 1990 a temporary-to-permanent pathway was established for highly skilled workers admitted to the United States under nonimmigrant programs. The paper argues that this policy shift has allowed employers to play a crucial role in the immigration of highly skilled workers, thereby creating labor-market institutional selection that gives a salary advantage to highly skilled temporary-admitted workers retained in the United States. Through analyses of the salary differentials among admission-category groups, the paper finds that the salary advantage is based on recruitment from Western countries, adjustment from temporary to permanent status after a second employer screening, working in the information technology sector and the private sector, holding a supervisory position, or having a skill-matched job, all of which are consequences of institutional selection rather than individual self-selection. Our results also reveal a difference between those admitted from abroad and those recruited from graduating foreign students in USA higher educational institutions, which suggests a distinction between overseas hiring and domestic hiring. Policy implications for the United States and other receiving countries are discussed.