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Coping with H-1B Shortages: Firm Performance and Mitigation Strategies

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  • Anna Maria Mayda
  • Francesc Ortega
  • Giovanni Peri
  • Kevin Y. Shih
  • Chad Sparber

Abstract

The United States' H-1B visa program, which allows private firms to hire highly skilled foreign workers, was so severely over-subscribed in the years since 2014 that H-1B status was distributed by lotteries to a subset of applicants. Using data on H-1B applications and on a range of outcomes for publicly traded companies, we find that employers using the H-1B program experienced reduced employment, sales and profits, compared to non-users in the years since 2014. We also find that some employers anticipated the rationing of H-1Bs and retained a larger share of H-1B workers, mitigating the damaging effects of H-1B rationing on their performance.

Suggested Citation

  • Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Y. Shih & Chad Sparber, 2020. "Coping with H-1B Shortages: Firm Performance and Mitigation Strategies," NBER Working Papers 27730, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27730
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    Cited by:

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    3. Sparber, Chad, 2025. "Weighting the H-1B Lottery: Implications for Worker and Diversity and Employment Concentration," IZA Discussion Papers 18333, IZA Network @ LISER.
    4. Britta Glennon, 2024. "How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1B Program," Management Science, INFORMS, vol. 70(2), pages 907-930, February.
    5. Agostina Brinatti & Mingyu Chen & Parag Mahajan & Nicolas Morales & Kevin Shih, 2024. "The Impact of Immigration on Firms and Workers: Insights from the H-1B Lottery," Working Paper 24-04, Federal Reserve Bank of Richmond.
    6. 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.
    7. Peter Norlander, 2021. "Do guest worker programs give firms too much power?," World of Labour, LISER, pages 484-484, June.
    8. 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.
    9. Mundra, Kusum & Bagheri, Omid, 2025. "H-1B Visa Program, Visa Cap and Foreign Worker Earnings," IZA Discussion Papers 18321, IZA Network @ LISER.
    10. Amuedo-Dorantes, Catalina & Shih, Kevin Y. & Xu, Huanan, 2020. "International Student Enrollments and Selectivity: Evidence from the Optional Practical Training Program," IZA Discussion Papers 13730, IZA Network @ LISER.
    11. 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.
    12. Kauhanen, Antti & DeVaro, Jed, 2024. "Economic Impacts of High-Skilled Immigration," ETLA Brief 141, The Research Institute of the Finnish Economy.
    13. 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.
    14. Michael A. Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," RFBerlin Discussion Paper Series 2134, ROCKWOOL Foundation Berlin (RFBerlin).
    15. Ariu, Andrea & Müller, Tobias & Nguyen, Tuan, 2023. "Immigration and the Slope of the Labor Demand Curve: The Role of Firm Heterogeneity in a Model of Regional Labor Markets," CEPR Discussion Papers 18091, Centre for Economic Policy Research.
    16. Raux, Morgan, 2023. "Recruitment Competition and Labor Demand for High-Skilled Foreign Workers," IZA Discussion Papers 16554, IZA Network @ LISER.
    17. Catalina Amuedo‐Dorantes & Kevin Shih & Huanan Xu, 2023. "The implications of optional practical training reforms on international student enrollments and quality," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 253-281, April.
    18. Eunbi Kim, 2024. "Does College Prestige Matter? Asian CEOs and High-Skilled Immigrant Hiring in the US," Work, Employment & Society, British Sociological Association, vol. 38(4), pages 1062-1086, August.
    19. Michal Burzynski & Giovanni Peri, 2024. "Natives Sorting and the Impact of Immigration on European Labor Markets," LISER Working Paper Series 2024-09, Luxembourg Institute of Socio-Economic Research (LISER).
    20. Sharma, Rishi R. & Sparber, Chad, 2024. "Buying lottery tickets for foreign workers: Lost quota rents induced by H-1B policy," Journal of International Economics, Elsevier, vol. 150(C).
    21. Pia M. Orrenius & Madeline Zavodny, 2025. "Temporary Fixes, Permanent Problems: Implications of the Growing Reliance on Liminal Status in U.S. Immigration Policy," Southern Economic Journal, John Wiley & Sons, vol. 92(2), pages 181-193, October.

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    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

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