> 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.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
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
> 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.
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)!
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.