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The impact of the H-1B cap exemption on Ph.D. labor markets

Author

Listed:
  • Yinjunjie Zhang

    (Australian National University)

  • Marco A. Palma

    (Texas A&M University)

Abstract

The American Competitiveness in the Twenty-First Century Act of 2000 (AC21) eliminated the H-1B cap for foreign employees of academic, nonprofit and government research organizations. This act potentially affects the job preferences of newly graduated foreign Ph.D. students. Choosing a career in an uncapped H-1B-qualified entity means circumventing the risk of facing the fiercely competitive H-1B application process and possibly avoiding potential losses due to a visa rejection. We use data from the census of Ph.D. graduates to examine the causal effect of this policy change on academic and industry labor markets in the USA. We find that as a result of this policy, Ph.D. graduates with temporary visas are 5 percentage points more likely to pursue a job in academia, and 3–4 percentage points less likely to choose a job in industry. A series of robustness checks exclude other external factors around the same time period driving the results.

Suggested Citation

  • Yinjunjie Zhang & Marco A. Palma, 2020. "The impact of the H-1B cap exemption on Ph.D. labor markets," Empirical Economics, Springer, vol. 59(5), pages 2125-2152, November.
    • Handle: RePEc:spr:empeco:v:59:y:2020:i:5:d:10.1007_s00181-019-01721-5
    DOI: 10.1007/s00181-019-01721-5
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    More about this item

    Keywords

    Academia; H-1B visa; Immigration law;
    All these keywords.

    JEL classification:

    • K37 - Law and Economics - - Other Substantive Areas of Law - - - Immigration Law
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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