The effect of low-skill immigration restrictions on US firms and workers: Evidence from a randomized lottery

Michael Clemens and Ethan Lewis ()
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Ethan Lewis: Dartmouth College

No WP26-11, Working Paper Series from Peterson Institute for International Economics

Abstract: This paper studies the economic effects of US restrictions on the employment of foreign workers in low-skill, nonfarm jobs through the H-2B visa. Leading industries that hire H-2B workers include groundskeeping, hospitality, construction, forestry, and seafood packing. US employers' access to this visa is limited by a federal government quota and allocated in part via a randomized lottery. The authors find that firms that can employ more H-2B workers in low-skill jobs due to the lottery increase their production, investment, and profits. The effect of H-2B hiring on US employment is zero or positive overall, and positive in rural areas, because the elasticity of substitution between H-2B and US workers is very low (0.8-2.0) and dominated by scale effects. Forensic analysis suggests extremely low substitutability with black-market labor.

Keywords: low-skill immigration; US firms; randomized lottery; H-2B visa; US employment; low-skill jobs; elasticity of substitution (search for similar items in EconPapers)
JEL-codes: D22 F22 J61 (search for similar items in EconPapers)
Date: 2026-07
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Related works:
Working Paper: The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery (2023)
Working Paper: The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery (2022)
Working Paper: The effect of low-skill immigration restrictions on US firms and workers: Evidence from a randomized lottery (2022)
Working Paper: The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery (2022)
Working Paper: The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery (2022)
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