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Low-Wage Jobs, Foreign-Born Workers, and Firm Performance

Author

Listed:
  • Amuedo-Dorantes, Catalina

    (University of California, Merced)

  • Arenas-Arroyo, Esther

    (Vienna University of Economics and Business)

  • Mahajan, Parag

    (University of Delaware)

  • Schmidpeter, Bernhard

    (Vienna University of Economics and Business)

Abstract

How do migrant workers impact firm performance? We exploit an unexpected change in firms’ likelihood of securing low-wage workers through the U.S. H-2B visa program to address this question. Using comprehensive administrative data, we find that access to H-2B workers raises firms’ annual revenues and survival likelihood without crowding out other forms of employment. We do not find evidence of negative spillover effects on competitor firms. Our results support the notion that guest worker programs can mitigate labor shortages while limiting harm to incumbent workers.

Suggested Citation

  • Amuedo-Dorantes, Catalina & Arenas-Arroyo, Esther & Mahajan, Parag & Schmidpeter, Bernhard, 2023. "Low-Wage Jobs, Foreign-Born Workers, and Firm Performance," IZA Discussion Papers 16438, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16438
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    References listed on IDEAS

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    1. Andreas Beerli & Jan Ruffner & Michael Siegenthaler & Giovanni Peri, 2021. "The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland," American Economic Review, American Economic Association, vol. 111(3), pages 976-1012, March.
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    3. Parag Mahajan, 2021. "Immigration and Local Business Dynamics: Evidence from U.S. Firms," Working Papers 21-18, Center for Economic Studies, U.S. Census Bureau.
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    5. Agostina Brinatti & Nicolas Morales, 2021. "Firm Heterogeneity and the Impact of Immigration: Evidence from German Establishments," Working Paper 21-16, Federal Reserve Bank of Richmond.
    6. Michael A. Clemens & Ethan G. Lewis & Hannah M. Postel, 2018. "Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion," American Economic Review, American Economic Association, vol. 108(6), pages 1468-1487, June.
    7. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711-750.
    8. Michael A. Clemens & Ethan G. Lewis, 2022. "The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery," CESifo Working Paper Series 10057, CESifo.
    9. Gianluca Orefice & Giovanni Peri, 2020. "Immigration and Worker-Firm Matching," NBER Working Papers 26860, National Bureau of Economic Research, Inc.
    10. 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..
    11. Shalise Ayromloo & Benjamin Feigenberg & Darren Lubotsky, 2020. "States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes," NBER Working Papers 26676, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Silliman, Mikko & Willén, Alexander, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," Discussion Paper Series in Economics 13/2024, Norwegian School of Economics, Department of Economics.

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    More about this item

    Keywords

    guest workers; migrants; employment; firm dynamics; H-2B visa;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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