3 ms·

The effect of H-1B quota on employment and selection of foreign-born labor (2018)

42 points by johntfella 1y ago

ludicrousdispla 1y ago
https://www.nber.org/system/files/working_papers/w23902/w23902.pdf https://www.nber.org/system/files/working_papers/w23902/w239...
barishnamazov 1y ago
The most counterintuitive finding: cutting H-1B quotas didn't help American workers, but it did make the remaining H-1B pool less innovative. Employment losses were heaviest at both the lowest AND highest wage levels, filtering out the most exceptional talent while concentrating visas among mid-skill workers and Indian-born computer workers due to network effects. Classic unintended consequence -- the policy achieved neither goal. Opponents didn't get more jobs for Americans, supporters lost the highest-impact innovators who drive patents and startups.
- klipt 1y ago
  Were the most innovative people actually "lost" or did they just switch to something like the O1 Visa which isn't subject to quota, and highly innovative people should qualify for?
  - bubblethink 1y ago
    O-1 is a useless visa. Nobody switches to it or uses it by choice. You only use it if you can't use H-1B.
  - barishnamazov 1y ago
    I would guess that they found different ways to stay and work. I know that some companies send people to their office abroad (e.g., Canada or Europe) until there's a workaround by doing the green card process or applying H1B until it works out. I did not end up using it, but I have personally "lost" the H1B lottery 3 times. I was also subject to the option above at some point.
    - p_l 1y ago
      Year of work in foreign office of a corporation enables transfer on L1 visa, common tactic in FAANG shops at one point
- Hucck 1y ago
  [flagged]
- chii 1y ago
  drafting specific, targeted policies in the hopes of achieving a targeted outcome (without any unintended consequences) is very difficult - it's almost as if human minds are not smart enough to consider all possible outcomes, and all possible ramifications! That's why i dislike gov't intervention - in most cases, these policies are drafted by vested interests, to the exclusion of some other group (who often then bear the brunt of the externalized cost of such a policy).
  - 0xDEAFBEAD 1y ago
    What we really need is a meta-policy to address this meta-problem. For example, before passing a law, politicians are required to sponsor a contest with a prize of $100K for the best argument that the law will create unintended consequences. (Half-joking, half-serious.)
- bjornsing 1y ago
  I doubt it was due to network effects. I’m probably one of those top quartile potential H1-B holders that never applied. My main reason for not applying is that the random nature of the lottery reduces the RoI on finding a US job so much that it becomes rational to stay in Sweden and focus on local / remote consulting opportunities. As I understand it the way those Indian IT firms get around that is that they hire locally in India and send in applications for more staff than they want visas for. So they can get around the lottery dynamics through collective action, something I can’t do.
  - bubblethink 1y ago
    That used to be a common abuse vector, but that loophole was fixed last year. Apps are deduped now (1 person, 1 app). It's still a lottery that is oversubscribed by something like 3x.
    - ralph84 1y ago
      How does 1 person, 1 app do anything to fix body shops flooding the zone by submitting apps for all of their employees knowing that most won’t win the lottery but whoever does they’ll ship to the US to subcontract out. All of the large Indian body shops have more employees than the cap.
      - bubblethink 1y ago
        Yes, that is still a problem, which is somewhat mitigated by the $200 fee to enter the lottery currently. The proposed change of giving higher odds to higher wages instead of a flat lottery is a step in the right direction.
    - secult 1y ago
      I believe he wasn't even thinking about duplication of applications per person, but the following scenario. Correct me if I'm wrong: Company A would like to hire 1000 qualified IT personnel. An Indian workforce provider has e.g. 10000 qualified people and would be able to get 5000 of them to apply for the visa. From those that win the lottery (e.g. 1 in 3) you would easily cover the demand of the Company A. Economy of scale works here.
CyberMacGyver 1y ago
I am sure people understand that H-1B issues are just red herring. Outsourcing is the real issue that needs to be talked more.
- ares623 1y ago
  Everything is a red herring to billionaires and corporations not being taxed/given unchecked power.
- bubblethink 1y ago
  Half the people complain about H-1B and the other half complain about outsourcing. Neither of them makes sense to me, but the outsourcing angle even less so. It's just labor cost arbitrage for knowledge work. And soon that arbitrage opportunity will perhaps shift from humans to llms. What is the issue with that?
  - momento 1y ago
    The “competition is scary, let’s build walls” approach usually looks good in the short term for a segment of workers, but over the long term it tends to weaken the economy. A country that shuts out global talent not only loses people who would have filled skill gaps, it also loses many who would have built the next companies, industries, or research breakthroughs. Not to mention, if companies can’t hire the talent they need in the US, they won’t just “make do” with whoever’s available... they’ll move operations elsewhere, which means fewer opportunities for the very people immigration restrictions are supposed to help.
    - johntfella 1y ago
      ''Time and again through our history, we have discovered that attempting merely to preserve the comfortable features of the present, rather than reaching for new levels of prosperity, is a sure path to stagnation'' - Alan Greenspan (https://www.federalreserve.gov/boarddocs/speeches/2004/20040312/default.htm https://www.federalreserve.gov/boarddocs/speeches/2004/20040...)
    - 1y ago
zaptheimpaler 1y ago
A lot of voters, MAGA and democrat have shown they do not want any more immigrants. It doesn’t matter what a paper says if they don’t read it. Democracy is about giving people what they want, good and hard. Just do it already, stop the visas, don’t dangle false promises over immigrants heads.
notmyjob 1y ago
So this demonstrated in effect widespread h1b abuse by corrupt corporations like infosys and tata comprises the bulk of h1b hiring. No surprise whatsoever.
itsdrewmiller 1y ago
The same study was posted yesterday at a different link (https://news.ycombinator.com/item?id=45367514 https://news.ycombinator.com/item?id=45367514). As I said then: > This sounds like a great natural experiment (the quota dropped by 3x!) until you realize that they weren't even coming close to hitting the old quota, and the number of approved h1bs actually rose in the two years after the quota was dropped. > https://www.uscis.gov/sites/default/files/document/data/h1b05annual_08_7.pdf https://www.uscis.gov/sites/default/files/document/data/h1b0...

42 points by johntfella 1y ago

https://www.nber.org/system/files/working_papers/w23902/w23902.pdf https://www.nber.org/system/files/working_papers/w23902/w239...

barishnamazov 1y ago

The most counterintuitive finding: cutting H-1B quotas didn't help American workers, but it did make the remaining H-1B pool less innovative. Employment losses were heaviest at both the lowest AND highest wage levels, filtering out the most exceptional talent while concentrating visas among mid-skill workers and Indian-born computer workers due to network effects. Classic unintended consequence -- the policy achieved neither goal. Opponents didn't get more jobs for Americans, supporters lost the highest-impact innovators who drive patents and startups.

klipt 1y ago
Were the most innovative people actually "lost" or did they just switch to something like the O1 Visa which isn't subject to quota, and highly innovative people should qualify for?
- bubblethink 1y ago
  O-1 is a useless visa. Nobody switches to it or uses it by choice. You only use it if you can't use H-1B.
- barishnamazov 1y ago
  I would guess that they found different ways to stay and work. I know that some companies send people to their office abroad (e.g., Canada or Europe) until there's a workaround by doing the green card process or applying H1B until it works out. I did not end up using it, but I have personally "lost" the H1B lottery 3 times. I was also subject to the option above at some point.
  - p_l 1y ago
    Year of work in foreign office of a corporation enables transfer on L1 visa, common tactic in FAANG shops at one point
Hucck 1y ago
[flagged]
chii 1y ago
drafting specific, targeted policies in the hopes of achieving a targeted outcome (without any unintended consequences) is very difficult - it's almost as if human minds are not smart enough to consider all possible outcomes, and all possible ramifications! That's why i dislike gov't intervention - in most cases, these policies are drafted by vested interests, to the exclusion of some other group (who often then bear the brunt of the externalized cost of such a policy).
- 0xDEAFBEAD 1y ago
  What we really need is a meta-policy to address this meta-problem. For example, before passing a law, politicians are required to sponsor a contest with a prize of $100K for the best argument that the law will create unintended consequences. (Half-joking, half-serious.)
bjornsing 1y ago
I doubt it was due to network effects. I’m probably one of those top quartile potential H1-B holders that never applied. My main reason for not applying is that the random nature of the lottery reduces the RoI on finding a US job so much that it becomes rational to stay in Sweden and focus on local / remote consulting opportunities. As I understand it the way those Indian IT firms get around that is that they hire locally in India and send in applications for more staff than they want visas for. So they can get around the lottery dynamics through collective action, something I can’t do.
- bubblethink 1y ago
  That used to be a common abuse vector, but that loophole was fixed last year. Apps are deduped now (1 person, 1 app). It's still a lottery that is oversubscribed by something like 3x.
  - ralph84 1y ago
    How does 1 person, 1 app do anything to fix body shops flooding the zone by submitting apps for all of their employees knowing that most won’t win the lottery but whoever does they’ll ship to the US to subcontract out. All of the large Indian body shops have more employees than the cap.
    - bubblethink 1y ago
      Yes, that is still a problem, which is somewhat mitigated by the $200 fee to enter the lottery currently. The proposed change of giving higher odds to higher wages instead of a flat lottery is a step in the right direction.
  - secult 1y ago
    I believe he wasn't even thinking about duplication of applications per person, but the following scenario. Correct me if I'm wrong: Company A would like to hire 1000 qualified IT personnel. An Indian workforce provider has e.g. 10000 qualified people and would be able to get 5000 of them to apply for the visa. From those that win the lottery (e.g. 1 in 3) you would easily cover the demand of the Company A. Economy of scale works here.

CyberMacGyver 1y ago

I am sure people understand that H-1B issues are just red herring. Outsourcing is the real issue that needs to be talked more.

ares623 1y ago
Everything is a red herring to billionaires and corporations not being taxed/given unchecked power.
bubblethink 1y ago
Half the people complain about H-1B and the other half complain about outsourcing. Neither of them makes sense to me, but the outsourcing angle even less so. It's just labor cost arbitrage for knowledge work. And soon that arbitrage opportunity will perhaps shift from humans to llms. What is the issue with that?
- momento 1y ago
  The “competition is scary, let’s build walls” approach usually looks good in the short term for a segment of workers, but over the long term it tends to weaken the economy. A country that shuts out global talent not only loses people who would have filled skill gaps, it also loses many who would have built the next companies, industries, or research breakthroughs. Not to mention, if companies can’t hire the talent they need in the US, they won’t just “make do” with whoever’s available... they’ll move operations elsewhere, which means fewer opportunities for the very people immigration restrictions are supposed to help.
  - johntfella 1y ago
    ''Time and again through our history, we have discovered that attempting merely to preserve the comfortable features of the present, rather than reaching for new levels of prosperity, is a sure path to stagnation'' - Alan Greenspan (https://www.federalreserve.gov/boarddocs/speeches/2004/20040312/default.htm https://www.federalreserve.gov/boarddocs/speeches/2004/20040...)
  - 1y ago

zaptheimpaler 1y ago

A lot of voters, MAGA and democrat have shown they do not want any more immigrants. It doesn’t matter what a paper says if they don’t read it. Democracy is about giving people what they want, good and hard. Just do it already, stop the visas, don’t dangle false promises over immigrants heads.

notmyjob 1y ago

So this demonstrated in effect widespread h1b abuse by corrupt corporations like infosys and tata comprises the bulk of h1b hiring. No surprise whatsoever.

itsdrewmiller 1y ago

The same study was posted yesterday at a different link (https://news.ycombinator.com/item?id=45367514 https://news.ycombinator.com/item?id=45367514). As I said then: > This sounds like a great natural experiment (the quota dropped by 3x!) until you realize that they weren't even coming close to hitting the old quota, and the number of approved h1bs actually rose in the two years after the quota was dropped. > https://www.uscis.gov/sites/default/files/document/data/h1b05annual_08_7.pdf https://www.uscis.gov/sites/default/files/document/data/h1b0...