> ABSTRACT
> We study the effects of H-1B immigration on U.S. industries that employ H-1B workers and their trading partners. Using a novel cross-industry design and the 1999–2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity shock rather than a labor supply shock. We find no direct effect on patenting, suggesting that productivity gains arise from better task execution rather than patentable invention.
I suspect this topic is too complicated to be truly captured by one such study. But I'll add that the observation of increased income is in line with the predictions of classical economists (e.g Adam Smith) in the case of a growing population. Classical economics says that population growth leads to increased productivity (efficiencies of scale, division of labor) and increased competition for scarce resources (in particular land) and hence that workers typically end up with an absolutely larger but proportionally smaller slice of the growing pie - house and land prices, commercial rents, etc increase at a faster rate than wages (therefore banks, landlords, etc benefit to a much larger extent than workers).
The other conclusions (patents, upstream/downstream) sound more tenuous and subjective. Supply vs productivity shock is also something of a niche/pedantic technical distinction in macroeconomic modelling - in wholistic terms, labor supply and productivity are inherently coupled via the market (a sudden supply of new laborers will lead to a sudden increase in absolute and per-worker productivity - think partial vs total derivatives).
I doubt the study can quantify labor costs artificially being bid down, lack of job security in seemingly fungible roles, or the relatively lower income for contract indentured desperate workers.
No one questions outsourcing likely generated lower-costs for shareholders or labor with stock options. However, did the policy improve productivity measured by revenue or in-house innovation... than probably not, as most of the IT industry retired... they left folks to fend for themselves on a rented cloud with a 43% staff incompetency rate.
Managers often get a percentage of the unspent division budget as a year end bonus as well. So the stats and incentives will skew even if 43% of the workforce is functionally irrelevant to a business. =3
Not only can't they quantify them, but classical economics would argue that they are all intrinsically coupled via the market.
As an example of how these variables are all entangled, say that your job pays 150k a year - you spend 50% of your time on a high value task and 50% on a low value task. The company values these at 50k and 100k each. The work force grows due to some policy change or market conditions, etc. Wages fall ~10% but the business is expanding and a new junior worker is found to do the low value task. The company now pays them 90k to do this task fulltime while you are paid 180k to do the high value task fulltime.
In this case wages have been bid down, income has gone up, the work force is less skilled on average, and productivity has increased in aggregate, per-dollar, and per-worker (no task switching)!
I don't buy the increased productivity argument either, for the same reason we don't skew opportunity cost for doctors to come and scrub our restaurant toilet stalls.
However, I do agree if you convince people they are worthless... one can likely underpay them more easily. Note, $150k is already a low living standard in places like silicon valley. =3
H-1B is not bad because its taking Americans jobs. Its bad because the rules make it easy to abuse workers by threatening them with deportation if they act up. Scrap the whole program and make it a lot easier to get normal work visa that are not bound to an employer.
Picked just 4 years? That sounds awfully sus. Like if you include 1998 or 2005 to the numbers still hold? How about 1990 to 2025? I'm not saying they are wrong, in fact I want to believe they are right. But so many econ papers are easy to tear down just by including a little more data.
It's a very specialist tome though, and I suspect it's meant to be quoted for its conclusion and abstract more than its methods. Having said that whether or not the "Synthetic Control Estimator" works as advertised, I think most people here will at least get a kick out of it.
Like anything there is a positive and a negative. It’s certain many incredibly talented people immigrated to America with OPT and H1B. However I have observed abuse with my own eyes of H1B labor outside of the FAANG and similar all stars who don’t have leverage to switch firms within the law and have the money or corporate backing to pay lawyers to dot all the Is and cross all the Ts.
Middle market firms love H1B because you get docile labor who don’t ask for raises. It’s market-warping and needs serious reform
I've also seen H1B abuse in startups. Maybe H1B abuse doesn't scale all the way down to 1-5 person companies, but 20-50? Absolutely. A single liason who knows the H1B process easily pays for themselves when you can turn around and hire 15 talented Big 10 grads 25% below market value.
This isn't me bitching about how them foreigners are suppressing wages or whatever. They aren't. I'm a citizen so I had leverage, and it wasn't that difficult to find greener pastures. It just sucks to see good people getting screwed. I helped a few of them get out with some strongly-worded letters of recommendation.
The problem with H-1B visas is that they are effectively golden handcuffs - tolerate whatever abuse we give you for X years and you get permanent residency.
The fix would be to allow H-1Bs to jump to any employment, not just employers capable of sponsoring an H-1B. But that creates a new problem: H-1B sponsoring employers are now spending extra time and bureaucracy just to be the welcome mat immigrants step on before getting a real job. This isn't really feasible for them.
It would be easier to more or less "just throw open the floodgates" - i.e. hand out work visas to anyone who can pass a background check and let them apply to any job a US worker can. This would immediately fix most immediately conceivable problems with restricted immigration creating a second class of worker that is cheaper to hire.
On the other hand, nobody wants immigrants anymore. There are an increasing number of people for whom their birth citizenship is the only valuable asset they have, and this sentiment is geographically distributed. It's actually more prevalent in the kinds of countries that are sending people to rich countries - i.e. ask the average Indian how they'd feel about, say, liberalizing immigration with Pakistan or Bangladesh, and they'd probably say something so racist it'd make people at MAGA rallies blush.
Of course, the reason why this happens is pretty straightforward: POSIWID. The people who benefit from immigration visas being handcuff-shaped are the same people who own the news media and are reminding people day in and day out how dangerous and awful the people they're bringing in are.
You might’ve seen abuse but it doesn’t mean it’s universal or those people aren’t better off even though they’re being “abused” , which is mostly your opinion else you should’ve reported there employers
Belief has nothing to do with this. If you think something is common then gather evidence of that and make a convincing case to support your claim. "Trust me, guy" doesn't cut it. "I've seen it" doesn't cut it.
It's an interesting paper, and it certainly takes "gather evidence and present it" part of the program very seriously.
> Using a novel cross-industry design and the 1999–2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity shock rather than a labor supply shock.
It doesn't matter yet because it hasn't actually happened: Trump's declaration was (unsurprisingly) another attempt to do something dictatorial, in particular usurping the power of Congress to create a tax, making the plan unconstitutional as well as illegal in some lesser ways.
At least for now, the US court system has correctly called that out, and has blocked the attempt because it's not something a legitimate President can do.
It seems the case is Californa v. Mullin, and the latest status is that his staff have filed an appeal (2026-06-12) asking a higher court to undo their loss.
The other conclusions (patents, upstream/downstream) sound more tenuous and subjective. Supply vs productivity shock is also something of a niche/pedantic technical distinction in macroeconomic modelling - in wholistic terms, labor supply and productivity are inherently coupled via the market (a sudden supply of new laborers will lead to a sudden increase in absolute and per-worker productivity - think partial vs total derivatives).
No one questions outsourcing likely generated lower-costs for shareholders or labor with stock options. However, did the policy improve productivity measured by revenue or in-house innovation... than probably not, as most of the IT industry retired... they left folks to fend for themselves on a rented cloud with a 43% staff incompetency rate.
Managers often get a percentage of the unspent division budget as a year end bonus as well. So the stats and incentives will skew even if 43% of the workforce is functionally irrelevant to a business. =3
As an example of how these variables are all entangled, say that your job pays 150k a year - you spend 50% of your time on a high value task and 50% on a low value task. The company values these at 50k and 100k each. The work force grows due to some policy change or market conditions, etc. Wages fall ~10% but the business is expanding and a new junior worker is found to do the low value task. The company now pays them 90k to do this task fulltime while you are paid 180k to do the high value task fulltime.
In this case wages have been bid down, income has gone up, the work force is less skilled on average, and productivity has increased in aggregate, per-dollar, and per-worker (no task switching)!
However, I do agree if you convince people they are worthless... one can likely underpay them more easily. Note, $150k is already a low living standard in places like silicon valley. =3
https://www.nber.org/system/files/working_papers/w35560/w355...
It's a very specialist tome though, and I suspect it's meant to be quoted for its conclusion and abstract more than its methods. Having said that whether or not the "Synthetic Control Estimator" works as advertised, I think most people here will at least get a kick out of it.
Middle market firms love H1B because you get docile labor who don’t ask for raises. It’s market-warping and needs serious reform
This isn't me bitching about how them foreigners are suppressing wages or whatever. They aren't. I'm a citizen so I had leverage, and it wasn't that difficult to find greener pastures. It just sucks to see good people getting screwed. I helped a few of them get out with some strongly-worded letters of recommendation.
The fix would be to allow H-1Bs to jump to any employment, not just employers capable of sponsoring an H-1B. But that creates a new problem: H-1B sponsoring employers are now spending extra time and bureaucracy just to be the welcome mat immigrants step on before getting a real job. This isn't really feasible for them.
It would be easier to more or less "just throw open the floodgates" - i.e. hand out work visas to anyone who can pass a background check and let them apply to any job a US worker can. This would immediately fix most immediately conceivable problems with restricted immigration creating a second class of worker that is cheaper to hire.
On the other hand, nobody wants immigrants anymore. There are an increasing number of people for whom their birth citizenship is the only valuable asset they have, and this sentiment is geographically distributed. It's actually more prevalent in the kinds of countries that are sending people to rich countries - i.e. ask the average Indian how they'd feel about, say, liberalizing immigration with Pakistan or Bangladesh, and they'd probably say something so racist it'd make people at MAGA rallies blush.
Of course, the reason why this happens is pretty straightforward: POSIWID. The people who benefit from immigration visas being handcuff-shaped are the same people who own the news media and are reminding people day in and day out how dangerous and awful the people they're bringing in are.
"Wait, it's all slavery?"
"Always has been."
It's an interesting paper, and it certainly takes "gather evidence and present it" part of the program very seriously.
> Using a novel cross-industry design and the 1999–2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity shock rather than a labor supply shock.
At least for now, the US court system has correctly called that out, and has blocked the attempt because it's not something a legitimate President can do.
It seems the case is Californa v. Mullin, and the latest status is that his staff have filed an appeal (2026-06-12) asking a higher court to undo their loss.