The Effects of High-Skilled Immigration Policy on Firms: Evidence from H-1B Visa Lotteries
We study the effect of a firm winning an additional H-1B visa on the firm’s outcomes, by comparing winning and losing firms in the Fiscal Year 2006 and 2007 H-1B visa lotteries. We match administrative data on the participants in these lotteries to the universe of approved U.S. patents, and to IRS data on the universe of U.S. firms. Winning additional H-1B visas has insignificant effects on firms’ patenting and use of the research and experimentation tax credit, with confidence intervals that generally rule out more than modest effects. Additional H-1Bs cause at most a moderate increase in firms’ overall employment, and these H-1Bs substantially crowd out firms’ employment of other workers. There is some evidence that additional H-1Bs lead to lower average employee earnings and higher firm profits.
This is a greatly revised version of NBER Working Paper 20668, previously titled “The Effect of High-Skilled Immigration on Patenting and Employment: Evidence from H-1B Visa Lotteries.” We thank U.S. Customs and Immigration Services for help with the H-1B lottery data. We thank Sunil Vidhani for outstanding research assistance. We thank Notre Dame and the Wharton School of the University of Pennsylvania for research support. We are grateful to George Borjas, John Bound, Sean Farhang, Richard Freeman, Hilary Hoynes, Jenny Hunt, Damon Jones, Larry Katz, Bill Kerr, Norman Matloff, Ankur Patel, Dina Pomeranz, Jesse Rothstein, and seminar participants at the Fed Board, HBS, NBER, CEMIR, U.S. Treasury, and WIGE for helpful comments. We thank Lee Fleming for sharing the patent data with us. We thank Danny Yagan for sharing his code to probabilistically identify natives and foreigners in the Treasury data. The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the U.S. Treasury Department, any other person associated with the U.S. Treasury Department, or the National Bureau of Economic Research. All errors are our own.
Alexander Gelber served as Deputy Assistant Secretary of the U.S. Treasury from 2012 to 2013 and worked on immigration reform proposals (among other issues). He has also been a consultant to Premise Data Corporation, and he is an advisor to Good World Solutions and Orange Door Research.