Foreign and Native Skilled Workers: What Can We Learn from H-1B Lotteries?

Giovanni Peri, Kevin Shih and Chad Sparber

No 21175, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In April of 2007 and 2008, the U.S. randomly allocated 65,000 H-1B temporary work permits to foreign-born skilled workers. About 88,000 requests for computer-related H-1B permits were declined in each of those two years. This paper exploits random H-1B variation across U.S. cities to analyze how these supply shocks affected labor market outcomes for computer-related workers. We find that negative H-1B supply shocks are robustly associated with declines in foreign-born computer-related employment, while native-born computer employment either falls or remains constant. Most of the correlation between H-1B supply shocks and foreign employment is due to rationing that varies with a city's initial dependence upon H-1B workers. Variation in random, lottery-driven, unexpected shocks is too small to identify significant effects on foreign employment in the full sample of cities. However, we do find that random rationing affects foreign employment in cities that are highly dependent upon the H-1B program. Altogether, the results support the existence of complementarities between native and foreign-born H-1B computer workers.

JEL-codes: F22 J61 O33 R10 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-lab and nep-mig
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