The H-1B Wage Gap, Visa Fees, and Employer Demand

George Borjas

No 26087, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: The H-1B program lets firms hire high-skill foreign workers for a six-year term. The annual number of visas allocated to for-profit firms is capped at 85,000 and there is excess demand for those visas. The analysis merges administrative data, including the I-129 petitions that report the wage offer made to specific H-1B beneficiaries, with the American Community Surveys. On average, H-1B workers earn 15 percent less than comparable natives, suggesting that firms may be willing to pay a one-time fee to obtain the visas. The data are examined using a labor demand model to simulate how a fee alters the hiring decision. For moderate levels of excess demand, the revenue maximizing fee ranges from $97,000 to $154,000 after allowing for unobserved productivity gains or costs associated with an H-1B hire, and for wage growth and job turnover in the H-1B workforce. The fee also changes the skill composition of that workforce, making it more skilled.

Keywords: High-skill immigration; H-1B program; visa fees (search for similar items in EconPapers)
JEL-codes: J08 J18 J69 (search for similar items in EconPapers)
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:26087

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