Are Immigrants Complements or Substitutes? Evidence from the Audit Industry

Forthcoming, Management Science

37 Pages Posted: 28 Aug 2015 Last revised: 22 Oct 2016

See all articles by Daniel Aobdia

Daniel Aobdia

Northwestern University - Kellogg School of Management

Anup Srivastava

University of Calgary - Haskayne School of Business

Erqiu Wang

affiliation not provided to SSRN

Date Written: October 18, 2016

Abstract

Extensive debate exists among policy makers and economists about the employment of highly skilled immigrants in the U.S. It remains unclear whether these immigrants perform complementary tasks in addition to their substitutive role relative to native graduates. Empirical studies examining these questions in a focused setting are scarce, principally because of nonavailability of data. We examine these questions using the audit industry as a setting because of availability of client, city, and office characteristics data at each audit office. This setting also allows us to answer whether immigration can address the growing human capital constraint in the audit industry. We find evidence of a complementary role of highly skilled immigrants. In addition, our results indicate a reputational spillover of client restatements at the audit office level to the labor markets. Our findings have immigration and education policy implications.

Keywords: Immigration, H-1B; visa quotas; auditing; human capital, auditing; restatements; reputation

JEL Classification: J15; J24; J61; M42; M48

Suggested Citation

Aobdia, Daniel and Srivastava, Anup and Wang, Erqiu, Are Immigrants Complements or Substitutes? Evidence from the Audit Industry (October 18, 2016). Forthcoming, Management Science. Available at SSRN: https://ssrn.com/abstract=2651328 or http://dx.doi.org/10.2139/ssrn.2651328

Daniel Aobdia

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

Anup Srivastava (Contact Author)

University of Calgary - Haskayne School of Business ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Erqiu Wang

affiliation not provided to SSRN

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