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The Impact of Immigration on Firms and Workers: Insights from the H-1B Lottery

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Abstract

We study how random variation in the availability of highly educated, foreign-born workers impacts firm performance and recruitment behavior. We combine two rich data sources: 1) administrative employer-employee matched data from the US Census Bureau; and 2) firm-level information on the first large-scale H-1B visa lottery in 2007. Using an event-study approach, we find that lottery wins lead to increases in firm hiring of college-educated, immigrant labor along with increases in scale and survival. These effects are stronger for small, skill-intensive, and high-productivity firms that participate in the lottery. We do not find evidence for displacement of native-born, college-educated workers at the firm level, on net. However, this result masks dynamics among more specific subgroups of incumbents that we further elucidate.

Suggested Citation

  • 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.
    • Handle: RePEc:fip:fedrwp:98171
    DOI: 10.21144/wp24-04
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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.
    2. Nada Wasi & Aaron Flaaen, 2015. "Record linkage using Stata: Preprocessing, linking, and reviewing utilities," Stata Journal, StataCorp LP, vol. 15(3), pages 672-697, September.
    3. 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.
    4. 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.
    5. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    6. Ariel Burstein & Gordon Hanson & Lin Tian & Jonathan Vogel, 2020. "Tradability and the Labor‐Market Impact of Immigration: Theory and Evidence From the United States," Econometrica, Econometric Society, vol. 88(3), pages 1071-1112, May.
    7. Prithwiraj Choudhury & Do Yoon Kim, 2019. "The ethnic migrant inventor effect: Codification and recombination of knowledge across borders," Strategic Management Journal, Wiley Blackwell, vol. 40(2), pages 203-229, February.
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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

    Immigration; Firm Dynamics; productivity; H-1B visas; High-skill immigration;
    All these keywords.

    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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