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The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery

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  • Michael A. Clemens
  • Ethan G. Lewis

Abstract

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.

Suggested Citation

  • Michael A. Clemens & Ethan G. Lewis, 2022. "The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery," CESifo Working Paper Series 10057, CESifo.
    • Handle: RePEc:ces:ceswps:_10057
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    References listed on IDEAS

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    1. Shalise Ayromloo & Benjamin Feigenberg & Darren Lubotsky, 2020. "States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes," NBER Working Papers 26676, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Silliman, Mikko & Willén, Alexander, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," Discussion Paper Series in Economics 13/2024, Norwegian School of Economics, Department of Economics.
    2. Catalina Amuedo-Dorantes & Esther Arenas-Arroyo & Parag Mahajan & Bernhard Schmidpeter, 2023. "Low-wage jobs, foreign-born workers, and firm performance," Economics working papers 2023-10, Department of Economics, Johannes Kepler University Linz, Austria.
    3. Fetzer, Thiemo & Palmou, Christina & Schneebacher, Jakob, 2024. "How do firms cope with economic shocks in real time?," The Warwick Economics Research Paper Series (TWERPS) 1517, University of Warwick, Department of Economics.

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    More about this item

    Keywords

    immigration; guest worker; H-2B; firms;
    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
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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