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Does the Restriction Policy of High-skill Immigrants Benefit Native Workers?

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  • Takuma Sugiyama

    (Research Institute for Economics & Business Administration, Kobe University and Graduate School of Economics, Osaka University, JAPAN)

Abstract

To protect native workers, discussions on immigration restrictions have emerged. However, limited studies have analyzed the economic impact of such restrictions on native workers. Past literature demonstrated a small effect of immigration restrictions on the labor outcomes of native workers, attributing it to capital substitution. Notably, this analysis focused on restrictions on low-skilled immigrants. Past literature of theoretical analysis highlighted that labor scarcity affects labor outcomes differently based on the substitutability of labor and capital. Anticipating a distinct impact, this paper examined the restriction of skilled immigrants exploiting the H-1B visa restrictions after 2004. The analysis, using triple differences estimation, revealed a significantly positive impact on labor outcomes of natives. Additionally, the visa restrictions positively impacted capital accumulation. These results suggest that the shortage of skilled labor supply induced capital accumulation. Nevertheless, capital investment could not fully adjust to the lack of labor supply, resulting in improved labor outcomes for natives.

Suggested Citation

  • Takuma Sugiyama, 2024. "Does the Restriction Policy of High-skill Immigrants Benefit Native Workers?," Discussion Paper Series DP2024-01, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2024-01
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2024-01.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Immigration; Labor economics; Labor policy; Technological change;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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