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Visa Concerns Keep Foreign PhDs Away from US Start-Ups

Start-up jobs chart

Share of US and foreign PhD industrial R&D employees working in a start-up, by degree field. (Proceedings of the National Academy of Sciences)

9 Aug. 2019. Science and engineering Ph.D.s from overseas receive as many job offers from U.S. start-ups as native-born doctorates, but accept the offers at less than half the rate. Results of a survey pointing to visa concerns as a reason for lower start-up employment appear in the 5 August issue of Proceedings of the National Academy of Sciences.

Cornell University business professor Michael Roach and University of California in San Diego sociologist John Skrentny conducted the survey to better understand factors in making employment decisions by newly-minted Ph.D.s in science and engineering. Roach and Skrentny focused on new foreign doctorates seeking industry R&D jobs, which as earlier studies indicate, are highly sought-after for their disproportionate contributions to technological innovation and new business formation.

Ph.D. students face a complex set of visa regulations upon graduation. Doctoral candidates study in the U.S. under an F-1 student visa, and after receiving their degree can remain in the U.S. for up to three years under the Optional Practical Training program. To stay in the U.S. for longer periods, graduating students need an employment-based visa, particularly the H-1B visa, allocated to employers. These visas increase the chance of securing a permanent resident visa, the highly-coveted “green card.”

The authors tracked 2,324 new Ph.D. recipients at top-tier U.S. research universities through their job search and subsequent employment. Roach and Skrentny first identified the institutions through National Science Foundation’s annual Survey of Earned Doctorates report, then collected some 30,000 e-mail addresses from the institution web sites, and invited individuals to take part. Participants were surveyed first as students, then following their degrees and subsequent employment. The authors supplemented their survey data with information gleaned from university web sites, LinkedIn pages, and search engine results.

Of the initial 2,324 survey participants, more than half, 1,336 or 57 percent, accepted industry R&D positions. The employers included mainly computer and information technology firms (31%), biotechnology or life science companies (27%), and R&D service businesses (15%). The companies ranged in size from giants like Google/Alphabet and Genentech to start-up enterprises.

Of the respondents, 16 percent of new Ph.D.s born in the U.S. accepted positions with start-up companies compared to 7 percent of foreign-born new doctorates. The researchers found this difference in start-up employment across academic degree field: computer science, engineering, and life sciences.

Yet, nearly equal percentages of U.S.-born (47%) and foreign-born (41%) applied for jobs at start-up enterprises, and of those applicants almost the same percentage of U.S.-born (62%) and foreign-born (58%) received offers from start-ups. For comparison, nearly all respondents in each group, 9 in 10 or more, applied for and received offers from established businesses.

In their surveys, the authors looked at several factors to explain this discrepancy, including work interests for employment in a startup or established companies, risk tolerance, preferences for higher pay, and worker ability. None of these factors explained the difference in start-up employment as much as visa concerns: The chance of landing an H-1B visa is much greater at an established business than a start-up company. Priority given to securing that initial visa is supported by data showing a higher percentage of foreign-born Ph.D.s accepting jobs with start-ups after they receive permanent residency, or green cards.

“A key insight from this research is that rather than fostering entrepreneurial activity,” says Roach in a UC-San Diego statement, “U.S. visa policies may disadvantage young technology start-ups, and this applies to start-ups founded by immigrants and U.S. citizens alike.”

“We often see great innovations coming from Google and Apple, but a lot of their innovation is actually from buying start-ups,” adds Skrentny. “These start-ups have trouble accessing the foreign talent our best universities are graduating.”

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