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Firm Dynamics and Immigration: The Case of High-Skilled Immigration

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  • Michael E. Waugh
Abstract
This paper shows how the dynamics of the firm yield new insights into the short- and long-run economic outcomes from changes in immigration policy. I quantitatively illustrate these insights by evaluating two policies: an expansion of and the elimination of the H-1B visa program for skilled labor. A change in policy changes firms’ entry and exit decisions as they dynamically respond to changes in market size. The dynamic response of firms amplifies changes in relative wages as labor demand shifts with the distribution of firms. Firms’ responses also lead to the rapid accrual of aggregate gains/losses in output and consumption. The welfare implications of policy changes depend critically on who bears the burden of creating new firms.

Suggested Citation

  • Michael E. Waugh, 2017. "Firm Dynamics and Immigration: The Case of High-Skilled Immigration," NBER Working Papers 23387, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:23387
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    References listed on IDEAS

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    Cited by:

    1. Esra Karapınar Kocağ & Yutong Li & Cristina Raluca Gh. Popescu, 2022. "The Determinants of Immigrants’ Skill Composition," JRFM, MDPI, vol. 15(9), pages 1-18, September.
    2. Gustavo González, 2023. "Entrepreneurship and the Efficiency Effects of Migration," Working Papers Central Bank of Chile 985, Central Bank of Chile.

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    More about this item

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • 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

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