How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1b Program

47 Pages Posted: 24 Jul 2020 Last revised: 31 Jul 2020

See all articles by Britta Glennon

Britta Glennon

Wharton School, University of Pennsylvania

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Date Written: July 2020

Abstract

Skilled immigration restrictions may have secondary consequences that have been largely overlooked in the immigration debate: multinational firms faced with visa constraints have an offshoring option, namely, hiring the labor they need at their foreign affiliates. If multinationals use this option, then restrictive migration policies are unlikely to have the desired effects of increasing employment of natives, but rather have the effect of offshoring jobs. Combining visa data and comprehensive data on US multinational firm activity, I find that restrictions on H-1B immigration caused foreign affiliate employment increases at the intensive and extensive margins, particularly in Canada, India, and China.

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Suggested Citation

Glennon, Britta, How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1b Program (July 2020). NBER Working Paper No. w27538, Available at SSRN: https://ssrn.com/abstract=3658832

Britta Glennon (Contact Author)

Wharton School, University of Pennsylvania

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