Winning the Visa Lottery
4 hours ago
- A randomized lottery for H-2B visas shows that restricting low-skill foreign workers shrinks businesses without creating jobs for Americans.
- Winning the lottery allows firms to hire nearly all requested workers, increasing revenue with an elasticity of about 0.20 and investment with an elasticity of 1.5–2.1.
- Losing firms did not increase employment of low-skill American workers; overall effect on US employment was zero or positive, with rural firms seeing a positive elasticity of 0.61.
- Low-skill foreign and American workers are poor substitutes, with elasticity of substitution far below previous estimates, due to a scale effect that swamps substitution.
- Findings suggest that increasing the H-2B visa cap would boost production, investment, and profits without reducing American employment, though benefits may be understated due to chronic uncertainty.