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The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor

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

Abstract

The H-1B program allows skilled foreign-born individuals to work in the United States. The annual quota on new H-1B visa issuances fell from 195,000 to 65,000 for employees of most firms in fiscal year 2004. However, this cap did not apply to new employees of colleges, universities, and non-profit research institutions. Additionally, existing H-1B holders seeking to renew their visa were also exempt from the quota. Using a triple difference approach, this paper demonstrates that cap restrictions significantly reduced the employment of new H-1B workers in for-profit firms relative to what would have occurred in an unconstrained environment. Employment of similar native workers in for profit firms did not change, however, consistently with a low degree of substitutability between H1B and native workers. The restriction also redistributed H-1Bs toward computer-related occupations, Indian-born workers, and firms using the H-1B program intensively.

Suggested Citation

  • Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Shih & Chad Sparber, 2017. "The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor," NBER Working Papers 23902, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23902
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    References listed on IDEAS

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    1. Catalina Amuedo-Dorantes & Delia Furtado, 2019. "Settling for Academia?: H-1B Visas and the Career Choices of International Students in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 54(2), pages 401-429.
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    Cited by:

    1. Morgan Raux, 2019. "Looking for the "Best and Brightest": Hiring difficulties and high-skilled foreign workers," AMSE Working Papers 1934, Aix-Marseille School of Economics, France.
    2. 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.
    3. Morgan Raux, 2019. "Looking for the "Best and Brightest": Hiring difficulties and high-skilled foreign workers," Working Papers halshs-02364921, HAL.
    4. Sparber, Chad, 2019. "Substitution between groups of highly-educated, foreign-born, H-1B workers," Labour Economics, Elsevier, vol. 61(C).
    5. Sara Signorelli, 2019. "Do Skilled Migrants Compete with Native Workers? Analysis of a Selective Immigration Policy," Working Papers halshs-01983071, HAL.
    6. Sara Signorelli, 2019. "Do Skilled Migrants Compete with Native Workers? Analysis of a Selective Immigration Policy," PSE Working Papers halshs-01983071, HAL.
    7. Gouranga Gopal Das & Sugata Marjit & Mausumi Kar, 2019. "Skill, Innovation and Wage Inequality: Can Immigrants be the Trump Card?," CESifo Working Paper Series 7794, CESifo Group Munich.

    More about this item

    JEL classification:

    • 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
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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