Coming to Work
The Role of High-Skilled Foreign Labor in Startup Performance: Evidence from Two Natural Experiments
Jun Chen, Shenje Hshieh & Feng Zhang
Journal of Financial Economics, forthcoming
We examine the role of high-skilled foreign labor in VC-backed startups through two natural experiments. First, we show that winning more H-1B visas in random lotteries enhances VC-backed startups' financial performance, likelihood of going public, and quantity and quality of innovation. Second, we show that the H-1B quota reduction in 2004 caused permanent damage to the performance of startups that previously had used H-1B workers. The findings imply that high-skilled foreign workers possess skills or talents that are difficult to replace and that barriers to securing H-1B visas lower startups' innovation and financial performance.
Illegal Immigration: The Trump Effect
Mark Hoekstra & Sandra Orozco-Aleman
NBER Working Paper, June 2021
Recent years have witnessed the emergence of increasingly provocative anti-immigrant politicians in both Europe and the United States. We examine whether the 2016 election of Donald Trump, who made illegal immigration and border enforcement a centerpiece of his campaign, reduced illegal immigration into the U.S. We exploit the fact the election result was widely unexpected and thus generated a large, overnight change in expected immigration policy and rhetoric. We compare migration flows before and after the election and find that while it reduced immigration among deported Mexicans and at least temporarily among Central Americans, it had no effect on the overall inflow of unauthorized Mexican workers.
Why Physical Barriers Backfire: How Immigration Enforcement Deters Return and Increases Asylum Applications
Justin Schon & David Leblang
Comparative Political Studies, forthcoming
What, if any, effect do physical barriers have on cross-border population movements? The foundational claim that barriers reduce migration flows remains unsupported. We conceptualize barriers as a tool of immigration enforcement, which we contend is one form of state repression. State repression could reduce mobilization (reduce immigration), have no effect on mobilization (barriers as symbolic political tools), or increase mobilization (backfire). We evaluate the relationship between barriers and cross-border population movements using a global directed dyad-year dataset for the 1990-2016 time period of all contiguous dyads and nearby non-contiguous dyads. Using instrumental variables, we find that physical barriers actually increase refugee flows, consistent with the "backfire effect" identified in research on United States immigration enforcement policies on its Mexican border. Furthermore, we find that state repression (immigration enforcement) creates this "backfire effect" via a "sunk costs" problem that reduces movements of people and increases movement of status from migrant to refugee.
The Impact of International Students on US Colleges: Higher Education as a Service Export
Princeton Working Paper, June 2021
Between 2005 and 2016, international enrollment in US higher education nearly doubled. I examine how trade shocks in education affect public universities' decision-making. I construct a shift-share instrument to exploit institutions' historical networks with different origins of international students, income growth, and exchange-rate fluctuations. Contrary to claims that US-born students are crowded out, I find that international students increase schools' funding via tuition payments, which leads to increased in-state enrollment and lower tuition prices. Schools also keep steady per-student spending and recruit more students with high math scores. Lastly, states allocate more appropriations to universities that attract fewer international students.
Best and Brightest? The Impact of Student Visa Restrictiveness on Who Attends College in the US
Mingyu Chen, Jessica Howell & Jonathan Smith
Princeton Working Paper, May 2021
Recent immigration policies have created massive uncertainty for international students to obtain F-1 visas. Yet, before the COVID-19 pandemic, student visa applicants already faced an approximately 27 percent refusal rate that varies by time and region. Using data on the universe of SAT takers between 2004 and 2015 matched with college enrollment records, we examine how the anticipated F-1 visa restrictiveness influences US undergraduate enrollment outcomes of international students. Using an instrumental variables approach, we find that a higher anticipated F-1 student visa refusal rate decreases the number of international SAT takers, decreases the probability of sending SAT scores to US colleges, and decreases international student enrollment in the US. The decreases are larger among international students with higher measured academic achievement. We also document academic achievement of international students and show that over 40 percent of high-scoring international SAT takers do not pursue US college education.
Diasporic Foreign Policy Interest Groups in the United States: Democracy, Conflict, and Political Entrepreneurship
Shubha Kamala Prasad & Filip Savatic
Perspectives on Politics, forthcoming
Why do some immigrant diasporas in the United States (U.S.) establish foreign policy interest groups while others do not? While scholars have demonstrated that diasporic interest groups often successfully influence U.S. foreign policy, we take a step back to ask why only certain diasporas attempt to do so in the first place. We argue that two factors increase the likelihood of diaspora mobilization: a community's experience with democratic governance and conflict in its country of origin. We posit that these conditions make it more likely that political entrepreneurs emerge to serve as catalysts for top-down mobilization. To test our hypotheses, we collect and analyze novel data on diasporic interest groups as well as the characteristics of their respective countries of origin. In turn, we conduct the first in-depth case studies of the historical and contemporary Indian-American lobbies, using original archival and interview evidence.
Immigration, Working Conditions, and Compensating Differentials
Chad Sparber & Madeline Zavodny
ILR Review, forthcoming
The large inflow of less-educated immigrants into the United States in recent decades may have affected US natives' labor market outcomes in many ways, including their working conditions. Although the general consensus is that low-skilled immigrants tend to hold "worse" jobs than US natives, the impact of immigration on natives' working conditions has received little attention. This study examines how immigration has affected US natives' occupational exposure to workplace hazards and the compensating differential paid for such exposure from 1990 to 2018. Results indicate that immigration causes less-educated natives' exposure to workplace hazards to fall, and instrumental variables results show a larger impact among women than among men. The corresponding compensating differential appears to fall among men, but not after accounting for immigration-induced changes in the financial returns to occupational skills.
Effect of the 1996 Welfare Reform on Undocumented Immigrants
University of Illinois Working Paper, May 2021
This paper examines the labor market effects of ending the Earned Income Tax Credit (EITC) for undocumented immigrants in the United States. The Welfare Reform Act of 1996 required that tax filers have a valid Social Security number to claim the EITC, thus disqualifying undocumented immigrants from receiving the EITC benefits. Comparing EITC per person in counties with different percentages of undocumented immigrants before and after 1996 reveals that counties with relatively higher percentages of undocumented immigrants lost approximately 154 USD per person of the EITC. Utilizing a difference-in-differences design that compares undocumented immigrants with and without children, uncovers that ending the EITC sharply reduced the labor supply of single-mothers undocumented immigrants by five percentage points even though it did not affect the labor force participation and earnings of undocumented immigrants in general. The results reflect the extremely inelastic labor supply of undocumented immigrants as a whole, but a high elasticity (0.88) for single-mother undocumented immigrants.
Do Local Immigrant-Welcoming Efforts Increase Immigration? The Detroit Experience
Urban Affairs Review, forthcoming
Immigration policymaking has been active at the local level in the United States over the past few decades. This study examines whether the economic development-oriented immigrant-welcoming efforts that started in 2010 in Detroit have increased the local immigrant population. It uses the synthetic control method to construct a comparison region that resembles Detroit in the preintervention periods to serve as a counterfactual. Empirical results reveal a statistically significant increase in the immigrant share of the population in the metropolitan area during the postintervention period of 2011-2014. The increase is robust to various sets of specifications and placebo tests. The share of high-skilled immigrants in the local population also increased during this time, albeit with a weak statistical significance. These findings point to the potential of immigrant-welcoming programs in attracting and retaining immigrants and immigrant talent.
Not diverse enough? Displacement, diversity discourse, and commercial gentrification in Santa Ana, California, a majority-Mexican city
Urban Studies, forthcoming
This research investigates how diversity discourse unfolds as part of commercial gentrification when public and private growth actors call for increased diversity in a city that is majority Latinx in the United States. My argument is twofold: first, commercial gentrification is itself a racialised project to manage diversity; second, the discourse around diversity foments spatial strategies used by both state and private actors that dislocate immigrant communities and economies. This in-depth case study using Santa Ana, California, provides a more nuanced understanding of the relationship between diversity and commercial gentrification in a majority Mexican immigrant city. The research finds that, as diversity discourse promotes liberal colourblind practices within a majority Latinx city, it also contributes to distributing resources along racial lines. Diversity discourse presented a liberal and inclusive form of gentrification while also providing a justification for the displacement of immigrant-serving businesses by positioning them as exclusionary or backward. The dislocation or erasure of immigrant-serving businesses occurred through spatial strategies backed by the state to make new property available in the downtown commercial area. Removal was not only physical but also occurred through assimilation, wherein businesses 'adapted' to survive. Planning and development actors in this case failed to recognise the value of cultural and economic community networks while also diverting attention and resources away from immigrant-serving businesses. The case provides unique insight into the multiplicity of economic and political interests in a Latinx-majority place.
Life after crossing the border: Assimilation during the first Mexican mass migration
David Escamilla-Guerrero, Edward Kosack & Zachary Ward
Explorations in Economic History, forthcoming
The first mass migration of Mexicans to the United States occurred in the early twentieth century: from smaller pre-Revolutionary flows in the 1900s, to hundreds of thousands during the violent 1910s, to the boom of the 1920s, and then the bust and deportations/repatriations of the 1930s. Using a new linked sample of males, we find that the average Mexican immigrant held a lower percentile rank, based on imputed earnings, than US-born whites near arrival. Further, Mexicans fell behind in the following decade. Mexican assimilation was not uniquely slow since we also find that the average Italian immigrant fell behind at a similar rate. Yet, conditional on geography, human capital, and initial percentile rank, Mexicans had a slower growth rate than both US-born whites and Italians. Mexican assimilation was also remarkably constant throughout various shocks, such as violence in Mexico, migration policy change in the United States, and the Great Depression. We argue that Mexican-specific structural barriers help to explain why Mexican progress was slow and similar across this tumultuous period.