Trend of Foreign Workers Leaving Likely to Accelerate as Economy Struggles

Nov. 7, 2008— -- Job losses and fears of a recession could lead more foreign workers and students in the United States to move back to their home countries -- and that has some economic observers worried.

Vivek Wadhwa, an executive resident at Duke University and a senior research associate at Harvard, believes that the United States is headed for a massive reverse brain drain.

Wadhwa, who led a Duke study on foreign-born professionals, said there likely won't be a short-term impact of loss of skilled expatriates, but it will have significant implications in the long term.

"It's a ticking time bomb for the U.S.," the former entrepreneur said. "If they [foreign nationals] go back to their home countries, not only will we lose critical talent we need for the future, we will also bolster our competition."

Skilled foreign workers and entrepreneurs comprise a significant portion of the U.S. workforce.

The study by Duke University and the Kaufman Foundation found that in more than 25 percent of technology companies established in the United States from 1995 to 2005, the chief executive or lead technologist was foreign-born.

In Silicon Valley, the percentage of immigrant-founded start-ups had increased to 52 percent in 2005. The study found that all companies founded by immigrants from 1995 to 2005 produced $52 billion in sales and employed 450,000 workers in 2005. Indians comprised the largest group of skilled foreign workers.

More than 1 million skilled foreign workers compete for 120,000 permanent U.S. resident visas each year. Each country has a seven percent limit, so, for example, India and China are given the same quota as Iceland.

According to the study, in U.S. engineering schools, 60 percent of Ph.D candidates and 42 percent of master's candidates are foreign nationals.

In the current climate, when hiring has declined, visa restrictions -- which make it harder for workers to stay in the U.S. without a job -- create significant challenges for foreign workers.

Large companies that traditionally recruited foreign talent on visas has declined as many have cut back on hiring. And unlike citizens, immigrants can lose their visa if they are laid-off, making it difficult for them to look for another position.