> 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
You may be conflating income/productivity with living standard. $150k is a high salary - but cost of living can be even higher. Note that cost of living is primarily a euphemism for rent. So you may be working in a highly productive / useful field and earning a high salary, while your actual standard of living has reduced because you pay more for housing, land, your local restaurant pays higher rent and therefore charges you more for meals, ditto for all other services, etc. This is in fact what Adam Smith would predict as a natural consequence of population increase.
Maybe in a 3rd world country, but that is borderline poverty living in silicon valley.
I think my anecdote of importing doctors to get paid scrubbing toilets is a fairly solid augment against artificial income suppression in any field of practice. Adam would likely be horrified modern indentured servitude proponents still exist. =3
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.
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.
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.
> 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.
Right, people on H-1B visas are being paid less in money because they are being partially compensated in the legal right to live in the US instead of India.
> 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.
Every single Pakistani and Bangladeshi could've been a citizen of India if a good number of people hadn't decided in 1947 to go to great lengths to make that not be the case; I for one am unwilling to say that they were wrong.
I think the framing that "their birth citizenship is the only valuable asset they have is mistaken; the actual valuable thing is not being a citizen of the other country demographically controlled by a rival ethno-religious group ("Unbiased at least he was when he arrived on his mission / Having never set eyes on the land he was called to partition / Between two peoples fanatically at odds, / With their different diets and incompatible gods").
> 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.
No they're not; these are separate groups of people. The people who benefit from immigration visas being handcuff-shaped are the immigrants themselves (because it's still better than living in India or Bangladesh), and certain wealthy business interests (who like being able to hire cheap labor and can more easily insulate themselves from the costs of the people doing that labor also existing in American society). The people constantly reminding American citizens how dangerous and awful the immigrants are, are not the same people as the business interests, and are explicitly willing to accept economic costs in order to not have the immigrants be physically present.
> The people constantly reminding American citizens how dangerous and awful the immigrants are, are not the same people as the business interests, and are explicitly willing to accept economic costs in order to not have the immigrants be physically present.
If you're talking about tech, you're correct[0]; but there are other industries that aren't so self-consistent. American agriculture is extremely dependent on immigrant labor and donates money to a party which is very explicitly anti-immigration. In fact, they are single-handedly the reason why attempts to curb illegal immigration have traditionally failed: all we'd have to do in the states is mandate e-Verify, but every bill to do that fails. When a state winds up figuring out a way to do the same thing, it creates an immediate and painful agricultural labor shortage - because the agricultural labor system is entirely flooded with illegal immigrants.
Or at least that was the case. I am told nowadays that the commonly-understood story of illegal immigration - i.e. people either overextending tourist visas or paying a drug smuggler to bring them across the country to do under-the-table work for small farmers - is largely obsolete. Nowadays the Mexican drug cartels have figured out how to work the legal immigration system. They have actual corporate identities in the US (usually something like "<State Name Here> Grower's Association" that can sponsor H-2A visas - the agricultural equivalent of tech's H-1B program. This is part of why ICE raids on farms have increased.
These "Grower's Associations" function a lot like temp agencies, except they hire (legal) immigrants at rock-bottom wages, are associated with organized crime, and if anyone quits their family eats lead. One of the hidden upsides of illegal immigration was that if someone gave you a shit job, you just ghosted them and found another. There was no punishment - I mean, even if the farmer reported them to ICE, they're ratting on themself. But these temp agencies are run by organized crime, and they know where your family lives (they wouldn't hire you otherwise), so they can make all sorts of threats and have the ability to make good on those threats.
From the point of view of the people who own the farms, they just see "hard working people" and don't ask too many questions. Actually, a lot of farms are run by people who don't ask a lot of questions, mainly because they don't understand farming and America's farm owners have always been a landed gentry that has no idea how to actually run a farm and wind up papering over their obvious business deficiencies with the most atrocious shit you'd ever see.
> Every single Pakistani and Bangladeshi could've been a citizen of India if a good number of people hadn't decided in 1947 to go to great lengths to make that not be the case; I for one am unwilling to say that they were wrong.
I am almost completely ignorant on the ongoing India/Pakistan rivalry; however, my view from several thousand miles away is that it's more or less three[1] different flavors of the same kind of corruption. Pakistan has a military that sucks their civilian government dry; India's entire banking sector exists to offload bad loans onto the state; and Bangladesh is being looted by businessmen who moonlight as politicians. The people in these countries are hyper-aware of and oppose these problems, but do not have a way to meaningfully check the power of the people causing them because the ongoing social divide between the Hindu/Indian and Muslim/Pakistani sides is overpowering. When you divide the people in half, you can convince each half to hate the other so thoroughly they won't notice your hand in their pocket.
In America, we actually had analogous dynamics. For example, pre-New Deal, one of the more effective ways to break a union was to exploit racial tensions among your workers. Unions have to be maximally inclusive, or they are ineffective. So that meant they were also unusually racially inclusive at a time when the rest of the country was hyper-obsessed about race - and bosses would exploit this. "Oh, why would you ever lower yourself to join a union? Don't you know they let BLACK PEOPLE[2] in?"
When you say the most valuable thing to poor people is not their citizenship, but "not being a citizen of the other country controlled by a rival ethno-religious group", you have to keep in mind that this is a divide-and-conquer attack against those same people. Your government and their government both want you to believe that the other side hates you, so you must hate them, and in order to do that you have to ignore all your own problems, which are really your leaders' fault, which you can't make them fix because doing so requires admitting fault to the enemy.
> Right, people on H-1B visas are being paid less in money because they are being partially compensated in the legal right to live in the US instead of India.
Not quite. It's more like "the law makes it a pain in the ass for an H-1B to switch jobs, and switching jobs is how people get a raise in the industries H-1Bs work in, so H-1Bs are paid at a discount". When you're an indentured servant, your lack of leverage makes you get paid less - even though the H-1B program specifically requires H-1Bs be paid the same wage as citizens doing the same job.
[0] Counterexamples being Elon Musk and Larry Ellison.
[1] As the original partition of India was based on the idea that a country had to have a clearly dominant majority religion, Pakistan and Bangladesh used to be one country.
[2] They would probably use some old-timey N word if they were polite, and the gamer N word if they were not.
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.
Every incentive is there. It benefits the company to take advantage of these people's visa restrictions. The capacity is there to do it without much risk.
The only saving grace would be a business who puts aside its own self interest to be good to their employees. That's very rare and you'd be naive to count on it.
That's not formal evidence of it being widespread but to me it's a strong enough argument to not put myself in that situation.
> 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
Maybe in a 3rd world country, but that is borderline poverty living in silicon valley.
I think my anecdote of importing doctors to get paid scrubbing toilets is a fairly solid augment against artificial income suppression in any field of practice. Adam would likely be horrified modern indentured servitude proponents still exist. =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."
Right, people on H-1B visas are being paid less in money because they are being partially compensated in the legal right to live in the US instead of India.
> 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.
Every single Pakistani and Bangladeshi could've been a citizen of India if a good number of people hadn't decided in 1947 to go to great lengths to make that not be the case; I for one am unwilling to say that they were wrong.
I think the framing that "their birth citizenship is the only valuable asset they have is mistaken; the actual valuable thing is not being a citizen of the other country demographically controlled by a rival ethno-religious group ("Unbiased at least he was when he arrived on his mission / Having never set eyes on the land he was called to partition / Between two peoples fanatically at odds, / With their different diets and incompatible gods").
> 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.
No they're not; these are separate groups of people. The people who benefit from immigration visas being handcuff-shaped are the immigrants themselves (because it's still better than living in India or Bangladesh), and certain wealthy business interests (who like being able to hire cheap labor and can more easily insulate themselves from the costs of the people doing that labor also existing in American society). The people constantly reminding American citizens how dangerous and awful the immigrants are, are not the same people as the business interests, and are explicitly willing to accept economic costs in order to not have the immigrants be physically present.
If you're talking about tech, you're correct[0]; but there are other industries that aren't so self-consistent. American agriculture is extremely dependent on immigrant labor and donates money to a party which is very explicitly anti-immigration. In fact, they are single-handedly the reason why attempts to curb illegal immigration have traditionally failed: all we'd have to do in the states is mandate e-Verify, but every bill to do that fails. When a state winds up figuring out a way to do the same thing, it creates an immediate and painful agricultural labor shortage - because the agricultural labor system is entirely flooded with illegal immigrants.
Or at least that was the case. I am told nowadays that the commonly-understood story of illegal immigration - i.e. people either overextending tourist visas or paying a drug smuggler to bring them across the country to do under-the-table work for small farmers - is largely obsolete. Nowadays the Mexican drug cartels have figured out how to work the legal immigration system. They have actual corporate identities in the US (usually something like "<State Name Here> Grower's Association" that can sponsor H-2A visas - the agricultural equivalent of tech's H-1B program. This is part of why ICE raids on farms have increased.
These "Grower's Associations" function a lot like temp agencies, except they hire (legal) immigrants at rock-bottom wages, are associated with organized crime, and if anyone quits their family eats lead. One of the hidden upsides of illegal immigration was that if someone gave you a shit job, you just ghosted them and found another. There was no punishment - I mean, even if the farmer reported them to ICE, they're ratting on themself. But these temp agencies are run by organized crime, and they know where your family lives (they wouldn't hire you otherwise), so they can make all sorts of threats and have the ability to make good on those threats.
From the point of view of the people who own the farms, they just see "hard working people" and don't ask too many questions. Actually, a lot of farms are run by people who don't ask a lot of questions, mainly because they don't understand farming and America's farm owners have always been a landed gentry that has no idea how to actually run a farm and wind up papering over their obvious business deficiencies with the most atrocious shit you'd ever see.
> Every single Pakistani and Bangladeshi could've been a citizen of India if a good number of people hadn't decided in 1947 to go to great lengths to make that not be the case; I for one am unwilling to say that they were wrong.
I am almost completely ignorant on the ongoing India/Pakistan rivalry; however, my view from several thousand miles away is that it's more or less three[1] different flavors of the same kind of corruption. Pakistan has a military that sucks their civilian government dry; India's entire banking sector exists to offload bad loans onto the state; and Bangladesh is being looted by businessmen who moonlight as politicians. The people in these countries are hyper-aware of and oppose these problems, but do not have a way to meaningfully check the power of the people causing them because the ongoing social divide between the Hindu/Indian and Muslim/Pakistani sides is overpowering. When you divide the people in half, you can convince each half to hate the other so thoroughly they won't notice your hand in their pocket.
In America, we actually had analogous dynamics. For example, pre-New Deal, one of the more effective ways to break a union was to exploit racial tensions among your workers. Unions have to be maximally inclusive, or they are ineffective. So that meant they were also unusually racially inclusive at a time when the rest of the country was hyper-obsessed about race - and bosses would exploit this. "Oh, why would you ever lower yourself to join a union? Don't you know they let BLACK PEOPLE[2] in?"
When you say the most valuable thing to poor people is not their citizenship, but "not being a citizen of the other country controlled by a rival ethno-religious group", you have to keep in mind that this is a divide-and-conquer attack against those same people. Your government and their government both want you to believe that the other side hates you, so you must hate them, and in order to do that you have to ignore all your own problems, which are really your leaders' fault, which you can't make them fix because doing so requires admitting fault to the enemy.
> Right, people on H-1B visas are being paid less in money because they are being partially compensated in the legal right to live in the US instead of India.
Not quite. It's more like "the law makes it a pain in the ass for an H-1B to switch jobs, and switching jobs is how people get a raise in the industries H-1Bs work in, so H-1Bs are paid at a discount". When you're an indentured servant, your lack of leverage makes you get paid less - even though the H-1B program specifically requires H-1Bs be paid the same wage as citizens doing the same job.
[0] Counterexamples being Elon Musk and Larry Ellison.
[1] As the original partition of India was based on the idea that a country had to have a clearly dominant majority religion, Pakistan and Bangladesh used to be one country.
[2] They would probably use some old-timey N word if they were polite, and the gamer N word if they were not.
It's an interesting paper, and it certainly takes "gather evidence and present it" part of the program very seriously.
The only saving grace would be a business who puts aside its own self interest to be good to their employees. That's very rare and you'd be naive to count on it.
That's not formal evidence of it being widespread but to me it's a strong enough argument to not put myself in that situation.
> 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.