Feb 27, 2013 · 2 minutes

A new report set to be released by the Kauffman Foundation today says the introduction of a “startup visa” for foreigners who want to start companies in the US could result in the creation of nearly 1.6 million jobs in the space of 10 years.

The report, entitled “Give Me Your Entrepreneurs, Your Innovators: Estimating the Employment Impact of a Startup Visa,” considers three scenarios based on a startup visa proposal that would make 75,000 visas available for current holders of the H-1B high-skilled immigrant visa or the F-1 foreign student visa. Under the conditions of such a visa, foreign entrepreneurs who employ at least five full-time employees and raise $100,000 for their companies would be able to apply for permanent residence in the US after four years. The report’s authors Dane Stangler and Jared Konczal suggest that those hypothetical four-year-old companies would go on to create between 500,000 and 1.6 million jobs after a decade, according to conservative estimates.

The 500,000 figure is based on legislative minimum requirements and applying company and employment survival rates from Census data. However, if the calculation were made according to Census data on average employment per firm, the job figure would shoot up to 900,000 after 10 years. The 1.6 million figure is based on an assumption that half of the startup visa companies would be technology and engineering companies, which have a better record of creating employment.

“None of these estimates take into account potential high-growth and scale firms or the continued growth of Startup Visa companies after they age out of the program,” the report’s authors note. “Nor do they account for a Startup Visa’s impact on innovation, GDP, and productivity.”

The startup visa has been a key rallying point for startup community leaders who are pushing for foreign entrepreneurs to be accounted for in proposals for comprehensive immigration reform currently being discussed by Congress. The two bi-partisan proposals before Congress that have most traction – the Immigration Innovation Act and another put forward by the so-called “Gang of Eight” senators – would increase the cap on high-skilled immigrants allowed to live in the US, but neither so far includes a provision for a startup visa.

Startup Act 3.0, a separate bill put forward by Senators Jerry Moran (R-KS), Mark Warner (D-VA), Chris Coons (D-DE), and Roy Blunt (R-MO), explicitly includes such a visa, but it has very little chance of passing this year.

Until now, it has been very difficult to quantify the potential economic benefits to the country of a startup visa. The Kauffman Foundation’s figures represent the most significant effort to date to assess the proposed visa’s impact. The full report is available at the Kauffman Foundation's website.

Read our ongoing coverage of the immigration reform debate.