The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor
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.
We are grateful for funding from the National Science Foundation, Award 1535723, for the project "The Effect of H-1B Workers on Innovation and Productivity." The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Shih & Chad Sparber, 2018. "The Effect of the H-1B Quota on the Employment and Selection of Foreign-Born Labor," European Economic Review, . citation courtesy of