Choosing Skilled Foreign‐Born Workers: Evaluating Alternative Methods for Allocating H‐1B Work Permits

32 Pages Posted: 20 Dec 2017

See all articles by Chad Sparber

Chad Sparber

Colgate University - Economics Department

Date Written: January 2018

Abstract

The H‐1B program allows highly educated foreign‐born labor to temporarily work in the United States. Quotas restrict the number of H‐1B recipients. In many years, all available work permits were allocated by random lottery. This paper argues that an alternative distribution method based upon ability would increase output, output per worker, and wages paid to less‐educated workers. Baseline estimates suggest that a change in allocation policy could result in a $26.5 billion gain for the economy over a 6‐year period. This estimate grows when H‐1B demand rises.

Suggested Citation

Sparber, Chad, Choosing Skilled Foreign‐Born Workers: Evaluating Alternative Methods for Allocating H‐1B Work Permits (January 2018). Industrial Relations: A Journal of Economy and Society, Vol. 57, Issue 1, pp. 3-34, 2018, Available at SSRN: https://ssrn.com/abstract=3090065 or http://dx.doi.org/10.1111/irel.12203

Chad Sparber (Contact Author)

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States

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