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Immigration Lottery Design: Engineered and Coincidental Consequences of H-1B Reforms

Author

Listed:
  • Parag A. Pathak

    (MIT)

  • Alex Rees-Jones

    (Cornell University)

  • Tayfun Sönmez

    (Boston College)

Abstract
In response to increasing demand for high-skilled labor, the U.S. Congress legislated in 2005 that the H-1B visa program create 20,000 additional slots for advanced degree applicants on top of 65,000 slots open to all. Since then, the U.S. Customs and Immigration Service (USCIS) has implemented this policy through visa allocation rules that comply with this legislation. Following a directive in the April 2017 Buy American and Hire American Executive Order by President Trump, USCIS tweaked its H-1B visa allocation rule in 2019, in an explicit effort to increase the share of higher-skill beneficiaries, bypassing the need for Congressional approval to increase the number of advanced degree slots. The USCIS estimated that the rule change, engineered solely for this objective, would increase the number of higher-skill beneficiaries by more than 5,000 at the expense of lower-skill beneficiaries. In this paper, we characterize all visa allocation rules that comply with the legislation. Despite specifying rigid caps, we show that the legislation still allows for rules that can change the number of high-skill awards by as many as 14,000 in an average year. Of all rules that comply with the legislation, the 2019 rule adopted by the Trump administration produces the best possible outcome for higher-skill applicants and the worst possible outcome for lower-skill applicants. We also discover that each of the two previous and much less known changes to the H-1B visa allocation rule resulted in more substantial changes to the share of higher-skill beneficiaries than the 2019 reform. The distributional effects of these earlier reforms in 2006 and 2008, how- ever, were motivated by logistical considerations, potentially without understanding of their importance for the rate of higher-skill awards.

Suggested Citation

  • Parag A. Pathak & Alex Rees-Jones & Tayfun Sönmez, 2020. "Immigration Lottery Design: Engineered and Coincidental Consequences of H-1B Reforms," Boston College Working Papers in Economics 993, Boston College Department of Economics, revised 20 Feb 2020.
    • Handle: RePEc:boc:bocoec:993
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    Cited by:

    1. Rees-Jones, Alex & D’Attoma, John & Piolatto, Amedeo & Salvadori, Luca, 2022. "Experience of the COVID-19 pandemic and support for safety-net expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1090-1104.
    2. Elias Bouacida & Renaud Foucart, 2020. "The acceptability of lotteries in allocation problems," Working Papers 301646245, Lancaster University Management School, Economics Department.
    3. Parag A. Pathak & Tayfun Sönmez & M. Utku Unver & M. Bumin Yenmez, 2020. "Leaving No Ethical Value Behind: Triage Protocol Design for Pandemic Rationing," NBER Working Papers 26951, National Bureau of Economic Research, Inc.
    4. Parag A. Pathak & Alex Rees-Jones & Tayfun Sönmez, 2023. "Reversing Reserves," Management Science, INFORMS, vol. 69(11), pages 6940-6953, November.
    5. Li, Mengling & Riyanto, Yohanes E. & Xu, Menghan, 2023. "Prioritized organ allocation rules under compatibility constraints," Games and Economic Behavior, Elsevier, vol. 141(C), pages 403-427.
    6. Parag A. Pathak & Tayfun Sönmez & M. Utku Ünver & M. Bumin Yenmez, 2024. "Fair Allocation of Vaccines, Ventilators and Antiviral Treatments: Leaving No Ethical Value Behind in Healthcare Rationing," Management Science, INFORMS, vol. 70(6), pages 3999-4036, June.
    7. In'acio B'o & Li Chen, 2021. "Designing Heaven's Will: The job assignment in the Chinese imperial civil service," Papers 2105.02457, arXiv.org, revised Sep 2021.
    8. Elias Bouacida & Renaud Foucart, 2022. "Rituals of Reason," Working Papers 344119591, Lancaster University Management School, Economics Department.
    9. P'eter Bir'o & Avinatan Hassidim & Assaf Romm & Ran I. Shorrer & S'andor S'ov'ag'o, 2020. "The Large Core of College Admission Markets: Theory and Evidence," Papers 2010.08631, arXiv.org, revised Aug 2022.
    10. Tayfun Sönmez & M. Bumin Yenmez, 2019. "Can Economic Theory be Informative for the Judiciary? Affirmative Action in India via Vertical and Horizontal Reservations," Boston College Working Papers in Economics 1026, Boston College Department of Economics, revised 23 Jun 2021.

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    More about this item

    Keywords

    H1B; Immigration Policy; Reserve Design;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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