Give me your wired and your highly skilled: measuring the impact of immigration policy on employers and shareholders

Abstract

This paper links finance theory to labor economics in the context of migration and immigration policy. Using event analysis, I measure the impact of immigration policy on the firm profits, in particular the American Competitiveness and Workforce Improvement Act (ACWIA) of 1998 nearly doubled the available number of H‐1B visas for skilled foreign workers in FY 1999. The empirical results show that top H‐1B visa user industries enjoyed significant and positive excess returns with the passage of the Act, while industries with little need for H‐1B visas experienced no significant changes. Several robustness checks support the results.