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

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  • Anna Maria Mayda
  • Francesc Ortega
  • Giovanni Peri
  • Kevin Shih
  • Chad Sparber

Abstract

The H-1B visa program allows companies to hire skilled foreign workers. Before 2014, the vast majority of these visas were allocated on a first-come-first-served basis. Since then, the program has been severely oversubscribed and all cap-subject visas have been allocated through lotteries. The authors merged Compustat data with administrative firm-level data on the universe of approved petitions for H-1B visas. Using difference-in-differences and matching estimators, this article finds that the switch in the visa allocation system negatively affected the growth of companies that used the H-1B program. Results indicate that these effects are quantitatively large and that their magnitudes grow over time.

Suggested Citation

  • Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Shih & Chad Sparber, 2023. "Coping with H-1B Shortages: Firm Performance and Mitigation Strategies," ILR Review, Cornell University, ILR School, vol. 76(5), pages 919-943, October.
    • Handle: RePEc:sae:ilrrev:v:76:y:2023:i:5:p:919-943
    DOI: 10.1177/00197939231165770
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    Cited by:

    1. Sharma, Rishi & Sparber, Chad, 2020. "Buying Lottery Tickets for Foreign Workers: Search Cost Externalities Induced by H-1B Policy," IZA Discussion Papers 13892, Institute of Labor Economics (IZA).
    2. Peter Norlander, 2021. "Do guest worker programs give firms too much power?," IZA World of Labor, Institute of Labor Economics (IZA), pages 484-484, June.
    3. Morgan Raux, 2019. "Looking for the "Best and Brightest": Hiring difficulties and high-skilled foreign workers," Working Papers halshs-02364921, HAL.
    4. Raux, Morgan, 2023. "Recruitment Competition and Labor Demand for High-Skilled Foreign Workers," IZA Discussion Papers 16554, Institute of Labor Economics (IZA).
    5. Andrea Ariu & Tobias Müller & Tuan Nguyen, 2023. "Immigration and the Slope of the Labor Demand Curve: The Role of Firm Heterogeneity in a Model of Regional Labor Markets," CESifo Working Paper Series 10344, CESifo.
    6. Catalina Amuedo‐Dorantes & Kevin Shih & Huanan Xu, 2023. "The implications of optional practical training reforms on international student enrollments and quality," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 253-281, April.
    7. Amuedo-Dorantes, Catalina & Shih, Kevin Y. & Xu, Huanan, 2020. "International Student Enrollments and Selectivity: Evidence from the Optional Practical Training Program," IZA Discussion Papers 13730, Institute of Labor Economics (IZA).
    8. Eunbi Kim, 2024. "Does College Prestige Matter? Asian CEOs and High-Skilled Immigrant Hiring in the US," Work, Employment & Society, British Sociological Association, vol. 38(4), pages 1062-1086, August.
    9. Michael Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," CESifo Working Paper Series 9464, CESifo.
    10. Sharma, Rishi R. & Sparber, Chad, 2024. "Buying lottery tickets for foreign workers: Lost quota rents induced by H-1B policy," Journal of International Economics, Elsevier, vol. 150(C).
    11. Prithwiraj Choudhury & Kirk Doran & Astrid Marinoni & Chungeun Yoon, 2022. "Loss of Peers and Individual Worker Performance: Evidence from H-1B Visa Denials," CESifo Working Paper Series 10152, CESifo.

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    More about this item

    Keywords

    H-1B visa; skilled labor; migration; firms; rationing;
    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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