Admission-group salary differentials in the United States: The significance of the labour-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 non-immigrant programmes. This paper argues that this policy shift has allowed employers to play a crucial role in the immigration of highly skilled workers, thereby creating labour-market institutional selection that gives a salary advantage to highly skilled temporarily admitted workers retained in the US. 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. The results also reveal a difference between those admitted from abroad and those recruited from graduating foreign students in US higher-education institutions, which suggests a distinction between overseas and domestic hiring. Policy implications for the US and other receiving countries are discussed. © 2013 Taylor and Francis Group, LLC.