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The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery

Author

Listed:
  • Clemens, Michael A.

    (George Mason University)

  • Lewis, Ethan Gatewood

    (Dartmouth College)

Abstract
The U.S. limits work visas for low-skill jobs outside of agriculture, with a binding quota that firms access via a randomized lottery. We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in U.S. employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations. Forensic analysis suggests similarly low substitutability of black-market labor.

Suggested Citation

  • Clemens, Michael A. & Lewis, Ethan Gatewood, 2022. "The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery," IZA Discussion Papers 15667, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp15667
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    References listed on IDEAS

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    1. Shalise Ayromloo & Benjamin Feigenberg & Darren Lubotsky, 2020. "States Taking the Reins? Employment Verification Requirements and Local Labor Market Outcomes," NBER Working Papers 26676, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Amuedo-Dorantes, Catalina & Arenas-Arroyo, Esther & Mahajan, Parag & Schmidpeter, Bernhard, 2023. "Low-Wage Jobs, Foreign-Born Workers, and Firm Performance," IZA Discussion Papers 16438, Institute of Labor Economics (IZA).
    2. Fetzer, Thiemo & Palmou, Christina & Schneebacher, Jakob, 2024. "How do firms cope with economic shocks in real time?," CAGE Online Working Paper Series 722, Competitive Advantage in the Global Economy (CAGE).
    3. Silliman, Mikko & Willén, Alexander, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," IZA Discussion Papers 17208, Institute of Labor Economics (IZA).
    4. Fetzer, Thiemo & Palmou, Christina & Schneebacher, Jakob, 2024. "How do firms cope with economic shocks in real time?," The Warwick Economics Research Paper Series (TWERPS) 1517, University of Warwick, Department of Economics.

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    More about this item

    Keywords

    immigration; immigrant; foreign; labor; mobility; skill; manual; high school; college; firms; elasticity; substitution; productivity; rural; urban;
    All these keywords.

    JEL classification:

    • 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
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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