America’s unemployment rate fell in May, but President Trump may still add more restrictions on temporary foreign workers in the United States. One category that he may target is the H‑4 visa for spouses of H‑1B high skilled workers.[1] Most H‑4 spouses cannot legally work—and so are forcibly unemployed—but some can, and it’s likely that restrictions would target their work authorization. This is a bad idea with long-term consequences that will extend far beyond this brief period of economic distress.

Nearly 90 percent of H‑4 workers are highly paid women from India with college degrees. The economic effect of terminating their employment would contract the economy by at least $7.5 billion annually. If the move encouraged their H‑1B families to leave the country, the impact would more than double. The employment authorization has also allowed workers to launch businesses that employ tens of thousands of Americans whose jobs are at risk.

As importantly, the H‑4 employment authorization is encouraging tens of thousands of talented foreigners to come and stay to the United States, despite America’s dysfunctional and hopelessly backlogged system for permanent residence. No one can expect tens of thousands of America’s most talented female workers to stay out of work forever. They will take their spouses and families and find some other country else to contribute to.

What is an H‑4 visa?

An H‑4 visa is a nonimmigrant (i.e. temporary) visa for the spouses and minor children of all H visa holders—which include H‑1B high-skilled workers as well as H‑2A and H‑2B for agricultural and nonagricultural seasonal workers.[2] However, it is quite rare for H‑2A or H‑2B workers to bring family because visa adjudicators treat family as a sign that they will overstay these short-term visas, and since all H‑2 workers return home, it makes little financial sense to bring family for a few months when their spouses cannot work. For this reason, H‑4s are almost solely the family of H‑1B workers, though the State Department doesn’t provide exact statistics.[3]

H‑4 visa holders can only enter the United States at the time of the approval of the primary H‑1B worker’s visa. H‑1B workers must be sponsored by a U.S. employer in a “specialty” occupation, mainly jobs that usually require a college degree or greater. Employers must receive a labor certification approval from the Department of Labor in which they agree to pay the prevailing wage for U.S. workers and pay fees, including funds for U.S. training and education.[4]

The validity of H‑4 status is entirely tied to the continued employment of their H‑1B worker spouse or parent. H‑1B status is initially valid for two three-year periods.[5] However, if their employer requests that the worker receives permanent residence, an H‑1B and H‑4 can continue to extend their status indefinitely in one-year increments until a green card is issued.[6] H‑4s must also file a Form I‑539 to renew their status and pay the $370 filing fee as well as an $85 biometric background check fee.[7] If the H‑1B worker falls out of status, the H‑4 visa holders must also leave.

What is the origin of the H‑4 visa?

Congress created H visas in the Immigration and Nationality Act of 1952,[8] but it did not authorize the admission of the spouses and minor children of H workers until the amendments of 1970.[9] The primary purpose of the 1970 amendment was to allow H‑1 workers to perform services that were not of a “temporary” nature.[10] While the addition of family goes unmentioned in the debate, Congress appears to have created the H‑4 visa to avoid extended periods of family separation as a result of the change.

The H‑1B visa was created in the Immigration Act of 1990.[11] The key difference between that and the earlier “H‑1” visa was that H‑1Bs no longer needed to prove that they had “nonimmigrant intent”—that is, no desire to relocate permanently to the United States.[12] Given that most immigrants could not easily prove a desire to return home, the rule was used to deny many applicants—for instance, about 80 percent of all Indian H‑1 visa applicants in 1990.[13] In other words, it wasn’t until the 1990s that the H‑4 became what it is today: a gateway to permanent residence for the spouses and children of many foreign workers.

There is no direct numerical limit or cap on the number of H‑4 visas.[14] Nonetheless, because their status is tied to their H‑1B parent or spouse, and the number of H‑1B workers at for-profit firms is limited to 85,000, there is an indirect limit.[15]

How has H‑4 use changed over time?

Figure 1 shows the number H‑4 visas issued by fiscal year from 1992 to 2018. The numbers increased from 24,756 in FY 1992 to 125,999 in FY 2019, though they have dropped from the peak in FY 2017.[16] Halfway through FY 2020, there had been 62,282 H‑4 visas issued. The State Department fails to classify them by whether they are spouses or children, but Figure 1 estimates the ratio by the share of spouses who receive permanent residence based on employer-sponsorship.

In 2019, about 79,000 H‑4 spouses were issued visas. From 1992 to 2018, the share of spouses among family of employment-based immigrants increased from 52 to 66 percent. This probably reflects the fact that H‑1B workers are remaining in the United States for longer periods before they receive permanent residence. During this period, more bring over their spouses, more of their children are born in the United States, and more of their foreign-born children “age-out” of H‑4 status and out of eligibility for a green card (meaning that they turn 21 and so are no longer eligible as a “minor child” of a worker).

No agency tracks the number of H‑1Bs or H‑4s in the country at any one time, but based on visa issuances, the H‑4 spousal population was probably around half a million in 2019.

What countries do H‑4s come from?

Figure 2 shows the number of H‑4s—spouses and children—by country of citizenship. Indians dominate the category with 106,162 H‑4 visas issued in 2019.[17] China and Mexico were second and third, respectively. All other countries had fewer than 1,000 H‑4s issued in 2019.

The Indian share of H‑4s (87 percent in 2020) is now quite disproportionate to their share of H‑1B visas issued (70 percent). The difference was just 2 percentage points in 1997. This growing gap is likely the result of the longer time that Indians spend in H‑1B status before receiving permanent residence relative to all other countries.[18] Indian H‑1Bs receiving permanent residence in 2020 spent at least a decade and, in many cases, as long as 15 years before receiving legal permanent residence. This means that they have more reasons to get married while in H‑1B status and bring over Indian spouses in H‑4 status.

What is an H‑4 employment authorization document (EAD)?

H‑4 employment authorization documents (EADs) allow certain H‑4 spouses to work legally in the United States.[19] H‑4 spouses are only eligible if their H‑1B spouses are going through the process to obtain permanent residence. One path requires only the employer of the H‑1B spouse have obtained an approved immigrant petition (I‑140), which is the basis for a worker to apply for permanent residence. A second more complicated path is also available: the H‑1B worker must be extending their status beyond the 6‑year H‑1B limit based on the employer filing either an I‑140 petition or permanent labor certification if a year has passed since the filing occurred.[20]

The first group would only apply to those immigrants who cannot immediately apply for permanent residence at the time a petition is approved as a result of the caps on green cards (almost exclusively Indians and Chinese), and almost everyone in the second group (filed after the 6‑year limit and pending approval) will eventually fall into the second (approved but waiting for a green card number). For this reason, the first group is much larger than the second.

An H‑4 EAD is valid for as long as H‑4 status is approved but is a separate application from H‑4 status.[21] Workers must submit a Form I‑765, application for employment authorization, along with a $410 filing fee.[22] These fees come in addition to the $370 filing fee to extend status and an $85 biometric fees.[23] H‑4 spouses of H‑1B workers who are extending beyond the 6‑year H‑1B limit must file these forms and pay the fees every year. Almost as soon as an application is approved, they must prepare the next one. An H‑1B worker and H‑4 spouse with an EAD extending beyond the 6‑year limit are sending the government at least $1,320 in immigration fees every year.

What is the legal origin of the H‑4 EAD?

While spouses of workers in other temporary worker categories—including L‑1, E‑1, E‑2, and E‑3—have had the right to work for decades, Congress has never required or prohibited employment authorization for H‑4 spouses of H‑1Bs. The Department of Homeland Security (DHS) created the H‑4 EAD by regulation in 2015, bringing the system more in line with these other statuses.[24] As it has in many other instances, DHS used its statutorily recognized discretionary authority to authorize employment to issue H‑4 EADs.[25]

DHS justified the rule by stating that “the change will ameliorate certain disincentives that currently lead H–1B nonimmigrants to abandon efforts to remain in the United States while seeking LPR status, thereby minimizing disruptions to U.S. businesses employing such workers.”[26] Further, it explained:

Retaining highly skilled workers who intend to acquire LPR status is important to U.S. businesses and to the Nation given the contributions of these individuals to U.S. businesses and the U.S. economy. These individuals, for example, contribute to advances in entrepreneurship and research and development, which are highly correlated with overall economic growth and job creation.[27]

The main reason that the rule was necessary, it stated, was that “H‑1B nonimmigrants and their families who wish to acquire LPR status in the United States must wait many years for employment-based immigrant visas to become available.”[28] Currently, Indians receiving legal permanent residence based on an employer petition waited at least 10 years from the time the petition was filed—nearly all had already entered the country on an H‑1B earlier.[29] New Indian applicants entering the backlog in 2020 must wait behind the line that has developed over the last decade. They face a wait of about nine decades, and about 200,000 existing applicants will likely die before receiving their green cards.[30]

The reason for this extreme outcome for Indians is that although they make up 54 percent of the workers that employers sponsor, they receive barely 10 percent of the green cards because green cards are not issued in proportion to the number of applicants from each country.[31] Instead, the law caps the number of green cards that any single country can receive at 7 percent, unless they would otherwise go unused, so the number of green cards for backlogged Indians could actually decline even further in future years if demand from the rest of the world increases, resulting in more waiting.

How many H‑4 visa holders are eligible to apply for an H‑4 EAD?

The government has not determined the exact number of H‑4 visa holders who meet the eligibility requirements for H‑4 EADs. However, it estimated that a maximum of about 179,600 could be eligible to work when the rule took effect in 2015.[32] In November 2019, about 290,000 spouses were awaiting employment-based green cards—about 260,000 of them were in H‑1B status.[33] There were probably another 10,000 whose H‑1B spouse was extending based on a labor certification request or filed but not approved petition for permanent residence.[34] This means that about 270,000 H‑4 visa holders could apply for an H‑4 EAD in 2019—about 86 percent are Indians.[35]

How many H‑4 visa holders have received employment authorization documents?

Figure 3 shows the number of H‑4 visa holders who received an employment authorization document by fiscal year either initially or through a renewal.[36] The average year from 2015 to 2019 saw 26,195 new H‑4 EADs issued—about as many renewals were issued in 2019. This number doesn’t tell us how many individuals have an EAD total, though the maximum length that an H‑4 EAD is valid is three years and the minimum is one year, so the number of H‑4 EAD holders is between 47,442 (renewals and initials in 2019) and 147,248 (the last three years of initials and renewals). Based on the large number of H‑4 holders who have been in the backlog longer than six years, it’s almost certainly closer to the middle of the range—perhaps 90,000.

What are the countries of birth for H‑4 EAD holders?

Figure 4 shows the countries of birth of H‑4 EAD recipients. Nearly 92 percent of initial applicants from 2015 to 2019 were born in India, 6 percent from China, and 2 percent from all other countries.[37] This corresponds closely to the shares of the employment-based backlog for legal permanent residence (green cards) as of November 2019.[38]

What is the educational attainment of H‑4 EAD holders?

H‑4 EAD holders are highly educated. While exact statistics for the entire population are not available from the government, the Department of Labor reports that 90 percent of H‑4 visa holders who employers sponsored for permanent residence in fiscal year 2019 had a bachelor’s degree or above, and 41 percent had a college degree.[39] As Figure 5 shows, H‑4 visa holders sponsored by their employers for permanent residence were nearly as educated as H‑1B workers in the same position in the immigration system.

What jobs do H‑4 EAD holders perform?

Once again, exact statistics for the entire population are not available from the government, but the Department of Labor reports that nearly two thirds of H‑4 visa holders sponsored by employers for permanent residence from 2015 to 2020 worked in computer and math occupations—nearly two thirds of those were software developers (Figure 6).[40] Other significant occupational categories were business and finance, architecture and engineering, management, and healthcare.

More than a thousand employers have sponsored H‑4 visa holders for green cards from 2015 to 2020. Although 82 percent of the requests came from other employers, the top ten employers directly requesting permanent residence for H‑4 visa holders were, in order, Intel, Microsoft, Amazon, Infosys, Cisco, Compunnel, Google, Apple, Cognizant, and Facebook.

What are the economic contributions of H‑4 EAD holders?

The Department of Labor reports that the median wage for H‑4 visa holders sponsored by employers for permanent residence in 2019 was $111,632.[41] This compares to median wage offer of $113,022 for H‑1B workers in the same position and $53,490 for all U.S. workers (Figure 7).[42] One survey found that 76 percent of H‑4 EAD holders had a job in 2018.[43] Economists have estimated that the direct cumulative effect of cutting off H‑4 employment would exceed $7.5 billion.[44] If the rule was rescinded, and the entire H‑1B family left, the direct economic effect would more than double, not including all the other indirect effects of H‑1B workers on U.S. innovation.[45]

The H‑4 EAD also contributes to U.S. entrepreneurship. Because the authorization is not tied to an employer like the H‑1B is, it allows workers to launch their own businesses. In a 2018 survey, about 7 percent of H‑4 EAD holders reported being self-employed and employing an average of 5 workers.[46] If the EAD population is 90,000, that would mean 6,300 entrepreneurs employing 31,500 U.S. workers. Nitin Pachisia, for example, describes how he used his wife’s H‑1B visa to obtain H‑4 status and then an H‑4 EAD in order to create his company.[47] “I ended up spending a lot of time learning immigration law myself, which is among the worst uses of an entrepreneur’s time,” he said in 2019. “I could be spending that time building my business.”

Hiral Sanghavi used the same H‑1B to H‑4 maneuver to found a new U.S. business in 2015 when the H‑4 EAD debuted. He now owns BauBax, a travel apparel company that had $20 million in sales in 2018 as well as 17 employees and contractors.[48] “If my wife for whatever reason is unable to renew her H‑1B, then we are without status. I would have within 30 days of the denial to shut down my company and leave the country,” he said at the time. Another threat now is that the government would stop issuing H‑4 EADs.

Are H‑4 EAD holders harming American workers?

The main argument that opponents use to argue for eliminating the H‑4 EAD is that during this period of high unemployment, the government should not allow foreign workers to work. But the fact is that unemployment is not high in computer occupations right now. In fact, the unemployment rate in computer occupations was almost exactly the same in April as it was in January.[49] More importantly, if a foreign worker does outcompete a U.S. worker for a specific job, economic theory and evidence is clear that the foreigner’s work creates another job for a U.S. worker elsewhere by increasing overall demand for jobs.[50] That explains how 97 percent of workers in computer jobs in April 2020 could be employed despite a huge influx of foreign workers over several decades.

Interestingly, as Stuart Anderson of the National Foundation for American Policy has noted, the Trump administration itself defended the H‑4 EAD rule in May 2020 in court, arguing that there was no basis for concluding that H‑4 EAD holders displace U.S. workers based on the “the present job market.”[51] It states that the evidence from a few U.S. workers challenging the rule “does not establish that Save Jobs’s members face a certain and great economic harm …”[52] It further stated that the idea that “the number of available information-technology jobs would significantly decline due to the H‑4 Rule … has not been shown.”

Not only are H‑4 EAD holders not harming U.S. workers, their high salaries indicate that they are subsidizing the government benefits for U.S. workers who cannot work during the pandemic. The National Academy of Sciences report on the fiscal effects of immigration concludes that college degree holders pay far more in taxes than they receive in benefits, so it is certain that the U.S. government budget would suffer if the rule were rescinded.[53] One estimate has placed the lost in 2018 at more than $2.4 billion annually.[54]

Conclusion

H‑4 EAD holders are highly educated contributors to the U.S. economy in their own right, but they are also important draws for keeping their talented spouses here as well. The National Science Foundation found that family motivated a quarter of foreign scientists and engineers who came between the ages of 18 and 34 to relocate to the United States.[55] Denying their family the right to work for many years could motivate just as many to leave the United States. The purpose of the H‑4 EAD rule was the prevent this outcome. It was the right goal in 2015, and it is just as important a goal in 2020.