Visa lottery study links low-skill guest workers to higher business investment

The short version

• A study in the American Economic Journal analyzed outcomes from the randomized H-2B temporary visa allocation process.[Hacker News]
• Businesses securing requested foreign workers reported higher revenues and increased investments in equipment, vehicles, and structures.[Hacker News]
• Firms losing the visa lottery reduced guest worker employment by half without adding low-skill American workers to compensate.[Hacker News]
• The authors note short-term estimates may understate impacts because persistent visa uncertainty discourages business investment.[Hacker News]

Key facts

• The 1990 Immigration Act established an annual cap of 66,000 H-2B visas, leading to heavy oversubscription such as 136,555 worker requests for 33,000 slots in late 2022.[Hacker News]
• After a 2019 server failure, the Department of Labor adopted a randomized system prioritizing applications by assigned letter groups.[Hacker News]
• Winning firms experienced revenue increases with an elasticity of roughly 0.20 and strong investment elasticity between 1.5 and 2.1 in structures, vehicles, and equipment.[Hacker News]
• Firms missing out in the lottery cut foreign worker employment by approximately half without increasing employment of low-skill domestic workers.[Hacker News]
• Researchers measured an elasticity of substitution between 0.8 and 2.2, suggesting domestic and H-2B workers are weak substitutes.[Hacker News]

Sources

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.

• Winning the Visa LotteryHacker News