Immigration Policy and Equity Returns: Evidence from the H-1B Visa Program

68 Pages Posted: 30 Jul 2018 Last revised: 22 Jan 2023

Date Written: December 8, 2022

Abstract

High-skill immigration allows firms to source talent from the international labor market. Using a comprehensive set of data on H1-B visa petitions, I construct a measure for firms' exposure to immigration policy shocks, and show that this exposure is an important determinant of the cross-section of equity returns. By exploiting a legislative cap reduction on H1-B visas as a quasi-natural experiment, I show that immigration policy shocks have a differential impact on the wages across occupations, leading to an asymmetry in firms' cash flow exposures to immigration policy shocks depending on the occupational composition of their existing labor force.

Keywords: Cross-Sectional Equity Pricing, Immigration, Human Capital, Wages, Financial Markets and the Macroeconomy

JEL Classification: G12, G18, G38, J4, J6

Suggested Citation

Sharifkhani, Ali, Immigration Policy and Equity Returns: Evidence from the H-1B Visa Program (December 8, 2022). Available at SSRN: https://ssrn.com/abstract=3222006 or http://dx.doi.org/10.2139/ssrn.3222006

Ali Sharifkhani (Contact Author)

Northeastern University ( email )

360 Huntington Ave.
Boston, MA 02115
United States

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