Research: Restricting Low-Skill Foreign Workers Shrinks Businesses, Does Not Create US Jobs

Study on H-2B Visa Lottery

Researchers Michael A. Clemens and Ethan G. Lewis investigated the economic impact of low-skill immigration using data from the US government's H-2B visa lottery. The H-2B visa program allows temporary foreign workers in seasonal jobs, with 98% of these positions not requiring a high school education.

Visa Cap and Demand

The Immigration Act of 1990 set the H-2B visa cap at 66,000 per year, a figure that now falls short of demand. For the second half of 2022, employers requested 136,555 workers for only 33,000 available visa slots.

Randomized Lottery Process

Following a server crash in 2019, the Department of Labor (DOL) implemented a randomized processing system for H-2B petitions. Firms are assigned a letter, and petitions are processed alphabetically. Firms with earlier letters are more likely to secure the requested workers, while those with later letters are not.

Research Methodology and Findings

The authors surveyed 472 businesses that participated in the 2021 and 2022 lotteries. Their pre-analysis plan and methodology mirrored a clinical trial design. The study found that firms that did not win the lottery experienced approximately a 50% reduction in their H-2B worker employment.

Economic Implications

The research indicates that restricting access to low-skill foreign workers leads to businesses shrinking. The study did not find evidence that these restrictions resulted in job creation for American workers, challenging some assumptions about the effects of low-skill immigration policies.