Loss of peers and individual worker performance: evidence from H-1B visa denials

Prithwiraj Choudhury, Kirk Doran, Astrid Marinoni and Chungeun Yoon

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study how restrictive immigration policies that result in the unexpected loss of coworkers affect the performance of skilled migrants employed in organizations. Specifically, we examine the impact of the loss of team members on their coworkers’ performance in response to the unexpectedly increased denials of extensions of H-1B work visas in the United States beginning in 2017. Losing a team member generally has a positive, albeit economically insignificant, effect on the performance of workers left behind. However, we find that individuals who lost peers of the same ethnic background experience a substantial decrease in their performance. To confirm that our results are not plagued by the presence of unobservable team or individual features that might impact visa denial decisions, we build an instrumental variable that exploits the fixed duration of the H-1B visa. Heterogeneity analyses suggest that our result is driven by workers in small teams, teams working on atypical tasks, and ethnically homogeneous teams. These analyses hint at the fact that ethnic ties may boost individual performance through preferential channels of knowledge and information spillovers.

Keywords: firm performance; geographic labor mobility; human capital; immigrant workers; occupational choice (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2024-04-23
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Published in Organization Science, 23, April, 2024, 35(6), pp. 2040-2063. ISSN: 1047-7039

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