8 ms·

Long-Run Effects of H-1B Immigration on the U.S. Economy (July 2026)

64 points by ryzvonusef 1mo ago

ryzvonusef 1mo ago
> 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.
- skew-aberration 1mo ago
  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).
  - Joel_Mckay 1mo ago
    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
    - skew-aberration 1mo ago
      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)!
      - Joel_Mckay 1mo ago
        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
        skew-aberration 1mo ago
        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.
steviewonderbre 1mo ago
[dead]
seibelj 1mo ago
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
- bamboozled 1mo ago
  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
  - tripleee 1mo ago
    you'd have to be pretty naive to think it wasn't common
    - EA-3167 1mo ago
      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.
      - rozal 1mo ago
        [dead]
      - tripleee 1mo ago
        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.
y-curious 1mo ago
Paywalled for me
- EA-3167 1mo ago
  Interesting, it shouldn't be. https://www.nber.org/system/files/working_papers/w35560/w35560.pdf 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.
la64710 1mo ago
Is it still an issue after Trump imposed a $100000 fee for h1-b applications?
- ChadNauseam 1mo ago
  Is what still an issue? This is from the article > 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.
- deleted 1mo ago
  [deleted]
- Terr_ 1mo ago
  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.
tancop 1mo ago
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.
- lazide 1mo ago
  Why not both?
- brikym 1mo ago
  Pretty sure that's the whole point. It's working as designed.
socalgal2 1mo ago
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.
- george916a 1mo ago
  [dead]

64 points by ryzvonusef 1mo ago

> 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.

skew-aberration 1mo ago
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).
- Joel_Mckay 1mo ago
  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
  - skew-aberration 1mo ago
    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)!
    - Joel_Mckay 1mo ago
      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
      - skew-aberration 1mo ago
        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.

steviewonderbre 1mo ago

[dead]

seibelj 1mo ago

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

bamboozled 1mo ago
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
- tripleee 1mo ago
  you'd have to be pretty naive to think it wasn't common
  - EA-3167 1mo ago
    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.
    - rozal 1mo ago
      [dead]
    - tripleee 1mo ago
      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.

y-curious 1mo ago

Paywalled for me

EA-3167 1mo ago
Interesting, it shouldn't be. https://www.nber.org/system/files/working_papers/w35560/w35560.pdf 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.

la64710 1mo ago

Is it still an issue after Trump imposed a $100000 fee for h1-b applications?

ChadNauseam 1mo ago
Is what still an issue? This is from the article > 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.
deleted 1mo ago
[deleted]
Terr_ 1mo ago
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.

tancop 1mo ago

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.

lazide 1mo ago
Why not both?
brikym 1mo ago
Pretty sure that's the whole point. It's working as designed.

socalgal2 1mo ago

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.

george916a 1mo ago
[dead]