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

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.