The Impact of Immigration on Firms and Workers: Insights from the H-1B Lottery

RePEc Short ID: psh619
ORCID iD: 0000-0003-3604-629X

Brinatti, Agostina; Chen, Mingyu; Mahajan, Parag; Morales, Nicolas; Shih, Kevin

doi:10.21144/wp24-04

Working Paper

The Impact of Immigration on Firms and Workers: Insights from the H-1B Lottery

Abstract: We study how random variation in the availability of highly educated, foreign-born workers impacts firm performance and recruitment behavior. We combine two rich data sources: 1) administrative employer-employee matched data from the US Census Bureau; and 2) firm-level information on the first large-scale H-1B visa lottery in 2007. Using an event-study approach, we find that lottery wins lead to increases in firm hiring of college-educated, immigrant labor along with increases in scale and survival. These effects are stronger for small, skill-intensive, and high-productivity firms that participate in the lottery. We do not find evidence for displacement of native-born, college-educated workers at the firm level, on net. However, this result masks dynamics among more specific subgroups of incumbents that we further elucidate.

Keywords: Immigration; Firm Dynamics; productivity; H-1B visas; High-skill immigration;

JEL Classification: F22; J61;

https://doi.org/10.21144/wp24-04