Visa Lottery Study: Cutting Low-Skill Immigration Shrinks Firms Without Adding American Jobs
Winning the Visa Lottery
A randomized H-2B visa lottery reveals that restricting low-skill foreign workers makes firms smaller, not more American jobs. Losing the lottery halved H-2B employment, cut revenue, and reduced investment. Low-skill US workers did not replace them; the scale effect dominated. The authors estimate a low elasticity of substitution, challenging the assumption that immigrant and native workers are perfect substitutes.
If you don't allow firms to hire immigrant workers, they just become smaller firms. They are not replaced with US workers. Instead, the output of the firm shrinks, and there are fewer total workers.