Startups in US Would Find It Harder To Hire Foreign Born PhDs

Startups in US Would Find It Harder To Hire Foreign Born PhDs

Foreign born PhD graduates are more likely to opt for a larger company than a startup in the US, according to a new study done by Cornell University and UC San Diego, primarily because of US visa policies.

The Cornell study found that while foreign born PhD graduates with science and engineering degrees from American universities are as likely to apply to, and get job offers from tech startups as US citizens, only half are likely to take this up. This is because a larger tech company has the resources and experience to sponsor foreign workers for an H-1B or a permanent residency visa.

“Startups typically have limited resources and managerial attention, and recruiting talented workers is a major activity for founders,” the study said. “This may be particularly challenging for technology startups seeking to hire highly specialized PhDs, as the number of potential employees with the necessary expertise may be small and difficult to find.”


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This study investigated differences between 2,324 foreign and US PhDs from US research universities. Among PhDs whose first job is industrial research & development, 15.8% of US PhDs work in a startup compared with 6.8% of foreign PhDs. Foreign PhDs are as likely as US PhDs to apply to and receive offers for startup jobs, but conditional on receiving an offer, they are 56% less likely to work in a startup.

This disparity is partially explained by differences in visa sponsorship between startups and established firms and not by foreign PhDs’ preferences for established firm jobs, risk tolerance, or preference for higher pay. Foreign PhDs who first work in an established firm and subsequently receive a green card are more likely to move to a startup than another established firm, suggesting that permanent residency facilitates startup employment, as per the report.

This suggests that US visa policies may deter foreign PhDs from working in startups, thereby restricting startups’ access to a large segment of the STEM PhD workforce and impairing startups’ ability to contribute to innovation and economic growth.

In addition to the cost of sponsoring a visa which can be upwards of $5,000 the process can also take several months, which can be difficult for a startup to manage.

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