Working Paper: CEPR ID: DP12736
Authors: Anna Maria Mayda; Francesc Ortega; Giovanni Peri; Kevin Shih; Chad Sparber
Abstract: The H-1B program allows skilled foreign-born individuals to work in the United States. The annual quota on new H-1B issuances fell from 195,000 to 65,000 for employees of most firms in fiscal year 2004. This cap did not apply to new employees of colleges, universities, and non-profit research institutions. Existing H-1B holders seeking to renew their visa were also exempt from the quota. Using a triple difference approach, this paper demonstrates that cap restrictions significantly reduced the employment of new H-1B workers in for-profit firms relative to what would have occurred in an unconstrained environment. Employment of similar natives in for-profit firms did not change, consistent with a low degree of substitutability between H-1B and native workers. The restriction also redistributed H-1Bs toward computer-relatedoccupations, Indian-born workers, and firms using the H-1B program intensively.
Keywords: skilled workers; H1B; natural experiment
JEL Codes: J61; F22; O33; R10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| H1B quota (J68) | employment of new H1B workers in for-profit firms (J68) |
| H1B quota reduction (J68) | employment of new H1B workers in for-profit firms (J68) |
| H1B quota (J68) | employment of similar native workers (J68) |
| H1B quota (J68) | redistribution of H1Bs toward occupations related to computers (L86) |
| H1B quota (J68) | employment of Indian-born workers (J68) |