The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery
The U.S. limits work visas for low-skill jobs outside of agriculture, with a binding quota that firms access via a randomized lottery. We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in U.S. employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations. Forensic analysis suggests similarly low substitutability of black-market labor.
Firm survey approved by the Dartmouth College Committee for the Protection of Human Subjects, #STUDY00032360, on October 21, 2021. Pre-analysis plan irreversibly registered the same day at https://osf.io/zdyun. We benefited from interactions with Suresh Naidu, Thomas Chaney, Melanie Morten, Ran Abramitzky, Dean Yang, Joan Llull, Paolo Falco, Chad Sparber, Jeremy Weinstein, Todd Schoellman, Nicolas Morales, Anna Maria Mayda, Joan Monras, Giovanni Peri, Muly San, Parag Mahajan, Sharat Ganapati, Marta Prato, Britta Glennon, and seminar participants at the Stanford University Dept. of Economics, the CESifo Venice Summer Institute, the Federal Reserve Bank of Richmond, the Bank of Canada Workshop on Macroeconomic Implications of Migration, and the Federal Reserve Bank of Atlanta. U.S. Citizenship and Immigration Services and the U.S. Department of Labor provided public data on the certification lottery. The firm survey was distributed by the National Association of Landscape Professionals, the Outdoor Amusement Business Association, the Seasonal Employment Alliance, and the American Seafood Jobs Alliance. We acknowledge support from Open Philanthropy and we thank Reva Resstack for research assistance. Any views expressed herein are those of the authors alone and do not represent any organization. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Michael A. Clemens
Michael Clemens is a senior fellow at the Center for Global Development, an independent and non-partisan think tank. He occasionally serves as a Special Government Employee, with the title of Expert Development Economist, in the Office of the Administrator at the US Agency for International Development. This research is unconnected to that position. It was conducted exclusively in his private capacity as a senior fellow of the Center for Global Development, and only using non-governmental resources, non-governmental communications, and publicly-available government data. The statements in this paper represent exclusively his own views and do not represent the US government or any agency or person in the government, nor do they represent the Center for Global Development or any other public or private organization.
- The US has long limited admission of contract foreign laborers for low-skill work in order to avoid adversely affecting US workers....