IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp18487.html

The H-1B Wage Gap, Visa Fees, and Employer Demand

Author

Listed:
  • Borjas, George

    (Harvard University)

Abstract

The H-1B program lets firms hire high-skill foreign workers for a six-year term. The annual number of visas allocated to for-profit firms is capped at 85,000 and there is excess demand for those visas. The analysis merges administrative data, including the I-129 petitions that report the wage offer made to specific H-1B beneficiaries, with the American Community Surveys. On average, H-1B workers earn 15 percent less than comparable natives, suggesting that firms may be willing to pay a one-time fee to obtain the visas. The data are examined using a labor demand model to simulate how a fee alters the hiring decision. For moderate levels of excess demand, the revenue maximizing fee ranges from $97,000 to $154,000 after allowing for unobserved productivity gains or costs associated with an H-1B hire, and for wage growth and job turnover in the H-1B workforce. The fee also changes the skill composition of that workforce, making it more skilled.

Suggested Citation

  • Borjas, George, 2026. "The H-1B Wage Gap, Visa Fees, and Employer Demand," IZA Discussion Papers 18487, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18487
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp18487.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kirk Doran & Alexander Gelber & Adam Isen, 2022. "The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries," Journal of Political Economy, University of Chicago Press, vol. 130(10), pages 2501-2533.
    2. Chen, Jun & Hshieh, Shenje & Zhang, Feng, 2021. "The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments," Journal of Financial Economics, Elsevier, vol. 142(1), pages 430-452.
    3. Doran, Kirk & Gelber, Alexander & Isen, Adam, 2022. "The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries," University of California at San Diego, Economics Working Paper Series qt4m50h88v, Department of Economics, UC San Diego.
    4. Joseph G. Altonji & Nicolas Williams, 2005. "Do Wages Rise with Job Seniority? A Reassessment," ILR Review, Cornell University, ILR School, vol. 58(3), pages 370-397, April.
    5. repec:mpr:mprres:6479 is not listed on IDEAS
    6. David Card & Jesse Rothstein & Moises Yi, 2024. "Industry Wage Differentials: A Firm-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 42(S1), pages 11-59.
    7. Michael A. Clemens, 2026. "Immigrant-Native Wage Gaps and Immigration Tariffs: Examining the Case for an H-1B Visa Tax," RFBerlin Discussion Paper Series 26072, ROCKWOOL Foundation Berlin (RFBerlin).
    8. 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..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emmott, Emily H. & Ihara, Yasuo & Tokumasu, Yudai & Nozaki, Mari & Saito, Atsuko & Kawamoto, Tetsuya & Ito, Shingo & Hassan, Anushé & Brown, Laura J. & Dennett, Thea & Crane, Andrew & Borra, Catherine, 2025. "Adolescence as a key period of identity development and connectedness: a comparative autophotography study in England and Japan," LSE Research Online Documents on Economics 129137, London School of Economics and Political Science, LSE Library.
    2. Spencer Ma, 2025. "Skilled Immigration and Business Diversity: Evidence from the H-1B Lottery," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 53(4), pages 323-338, December.
    3. Prithwiraj Choudhury & Kirk Doran & Astrid Marinoni & Chungeun Yoon, 2022. "Loss of Peers and Individual Worker Performance: Evidence from H-1B Visa Denials," CESifo Working Paper Series 10152, CESifo.
    4. Amior, Michael & Stuhler, Jan, 2023. "Immigration, Monopsony and the Distribution of Firm Pay," IZA Discussion Papers 16692, IZA Network @ LISER.
    5. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2016. "Global Talent Flows," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 83-106, Fall.
    6. Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Shih & Chad Sparber, 2018. "New Data and Facts on H-1B Workers across Firms," NBER Chapters, in: The Roles of Immigrants and Foreign Students in US Science, Innovation, and Entrepreneurship, pages 99-121, National Bureau of Economic Research, Inc.
    7. Ben A. Rissing & Laura Carver, 2025. "The Need for Speed: The Role of Employers in Immigrant Work Visa Regulatory Prioritization," ILR Review, Cornell University, ILR School, vol. 78(1), pages 155-189, January.
    8. Peter Norlander, 2021. "Do guest worker programs give firms too much power?," World of Labour, LISER, pages 484-484, June.
    9. Sparber, Chad, 2019. "Substitution between groups of highly-educated, foreign-born, H-1B workers," Labour Economics, Elsevier, vol. 61(C).
    10. Brunello, Giorgio & Lodigiani, Elisabetta & Rocco, Lorenzo, 2020. "Does low-skilled immigration increase profits? Evidence from Italian local labour markets," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    11. Seoyoung Kwon & Jongkwan Lee & Joan Monràs, 2026. "The effect of retaining high-skilled international graduates: Evidence from the STEM OPT extension," Economics Working Papers 1940, Department of Economics and Business, Universitat Pompeu Fabra.
    12. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2017. "High-Skilled Migration and Agglomeration," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 201-234, September.
    13. 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.
    14. Lin, Gary C., 2019. "High-skilled immigration and native task specialization in U.S. cities," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 289-305.
    15. Jeremias Nieminen & Sanni Kiviholma & Ohto Kanninen & Hannu Karhunen, 2024. "Regulating Labor Immigration: The Effects of Lifting Labor Market Testing," Working Papers 344, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    16. Castro-Pires, Henrique & Fischer, Kai & Mello, Marco & Moscelli, Giuseppe, 2025. "Immigration, Workforce Composition, and Organizational Performance: The Effect of Brexit on NHS Hospital Quality," IZA Discussion Papers 17797, IZA Network @ LISER.
    17. Silke Anger & Jacopo Bassetto & Malte Sandner, 2024. "Lifting Barriers to Skill Transferability: Immigrant Integration through Occupational Recognition," Development Working Papers 498, Centro Studi Luca d'Agliano, University of Milano.
    18. Jongkwan Lee & Seoyoung Kwon & Joan Monràs, 2026. "The Effect of Retaining High-Skilled International Graduates: Evidence from the STEM OPT Extension," Working Papers 1564, Barcelona School of Economics.
    19. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2016. "Global Talent Flows," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 83-106, Fall.
    20. Chad Sparber, 2018. "Choosing Skilled Foreign†Born Workers: Evaluating Alternative Methods for Allocating H†1B Work Permits," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(1), pages 3-34, January.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp18487. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.