IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v108y2018icp105-128.html
   My bibliography  Save this article

The effect of the H-1B quota on the employment and selection of foreign-born labor

Author

Listed:
  • Mayda, Anna Maria
  • Ortega, Francesc
  • Peri, Giovanni
  • Shih, Kevin
  • Sparber, Chad

Abstract

The H-1B program allows skilled foreign-born individuals to work in the United States. The annual quota on new issuances of H-1B status fell from 195,000 to 65,000 in fiscal year 2004. This cap did not apply to new employees of colleges, universities, and non-profit research institutions. Existing H-1B holders seeking to renew their status were also exempt from the quota. Using a triple difference approach, this paper demonstrates that cap restrictions significantly reduced the hiring of new H-1B workers in for-profit firms relative to what would have occurred in an unconstrained environment. Declines were most pronounced at the top and bottom quintiles of the wage distribution. Restrictions did not reduce hiring of new H-1B workers from India, in computer-related occupations, or at firms using the H-1B program intensively.

Suggested Citation

  • Mayda, Anna Maria & Ortega, Francesc & Peri, Giovanni & Shih, Kevin & Sparber, Chad, 2018. "The effect of the H-1B quota on the employment and selection of foreign-born labor," European Economic Review, Elsevier, vol. 108(C), pages 105-128.
  • Handle: RePEc:eee:eecrev:v:108:y:2018:i:c:p:105-128
    DOI: 10.1016/j.euroecorev.2018.06.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014292118300965
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Specificity Of Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 63-115, February.
    2. Amuedo-Dorantes, Catalina & Furtado, Delia, 2016. "Settling for Academia? H-1B Visas and the Career Choices of International Students in the United States," IZA Discussion Papers 10166, Institute of Labor Economics (IZA).
    3. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    4. Michèle V. K. Belot & Timothy J. Hatton, 2012. "Immigrant Selection in the OECD," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1105-1128, December.
    5. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    6. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 705-746.
    7. Takao Kato & Chad Sparber, 2013. "Quotas and Quality: The Effect of H-1B Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 109-126, March.
    8. William R. Kerr & William F. Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 473-508, July.
    9. Barry R. Chiswick, 1999. "Are Immigrants Favorably Self-Selected? An Economic Analysis," University of Chicago - George G. Stigler Center for Study of Economy and State 147, Chicago - Center for Study of Economy and State.
    10. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    11. Kevin Shih, 2016. "Labor Market Openness, H-1b Visa Policy, And The Scale Of International Student Enrollment In The United States," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 121-138, January.
    12. Yiu Por Chen, 2005. "Skill-Sorting, Self-Selectivity, and Immigration Policy Regime Change: Two Surveys of Chinese Graduate Students' Intention to Study Abroad," American Economic Review, American Economic Association, vol. 95(2), pages 66-70, May.
    13. Giovanni Peri & Kevin Shih & Chad Sparber, 2016. "STEM Workers, H-1B Visas, and Productivity in US Cities," World Scientific Book Chapters,in: The Economics of International Migration, chapter 9, pages 277-307 World Scientific Publishing Co. Pte. Ltd..
    14. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    15. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-553, September.
    16. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
    17. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sara Signorelli, 2019. "Do Skilled Migrants Compete with Native Workers? Analysis of a Selective Immigration Policy," PSE Working Papers halshs-01983071, HAL.

    More about this item

    Keywords

    Skilled workers; H-1B; Natural experiment;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:108:y:2018:i:c:p:105-128. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/eer .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.