Population Research and Policy Review 20: 135–141, 2001.
© 2001 Kluwer Academic Publishers. Printed in the Netherlands.
High-end immigrants and the shortage of skilled labor
THOMAS J. ESPENSHADE
Ofﬁce of Population Research, Princeton University
The 1990 Immigration Act (IMMACT) responded to claims of an impend-
ing shortage of skilled labor in the United States (Johnston & Packer 1987)
and to growing concerns that the skill levels of immigrant workers were
falling farther and farther behind those of natives (Borjas 1990, 1994). IM-
MACT raised the annual number of employment-based permanent resident
visas from 54,000 to 140,000 and created a new temporary-worker cat-
egory (H-1B) to permit US employers to recruit skilled workers from abroad
for professional ‘specialty occupations’. The latter include, for example,
computer programmers, engineers, medical professionals, and accountants.
H-1B workers must have at least a bachelor’s degree or its equivalent, and
they may remain in the United States for up to six years. In 1990 Congress
decided to cap the number of newly admitted H-1B workers at 65,000 per
This ceiling proved sufﬁcient for most of the 1990s, but the growing
demand for H-1B workers created a visa shortage in ﬁscal year (FY) 1997
and again in 1998 (Martin 1999).
The FY 98 ceiling was reached in May,
and the Immigration and Naturalization Service reported that the cumulative
backlog had reached at least 30,000 by the end of the ﬁscal year (National
Conference of State Legislatures, 1998). Congress eased the annual quota on
H-1B visas in October 1998 when it passed the American Competitiveness
and Workforce Improvement Act. This act increased the number of temporary
visas for highly skilled foreign workers to 115,000 in FY 99 and FY 00 and to
107,500 in FY 01 before returning to 65,000 in FY 02 and beyond.
more than 90,000 H-1B petitions subject to the new cap had been approved
by the end of March 1999, and by June 1999 the larger supply was exhausted
once again (Colon 1999; Newhouse News Service 1999). The H-1B visa limit
for FY00 was reached in March 2000, six months before the end of the ﬁscal
year (Alvarez 2000).
Just before the end of ﬁscal year 2000 the U.S. Congress acted once again
to liberalize restrictions on the number of H-1B visa holders. Both the Senate
and the House of Representatives on October 3 passed the American Com-
petitiveness in the 21st Century Act of 2000. This new bill raises the ceiling