Chad Sparber

Task Specialization, Immigration, and Wages

Many workers with low levels of educational attainment immigrated to the United States in recent decades. Large inflows of less educated immigrants would reduce wages paid to comparably-educated native-born workers if the two groups are perfectly substitutable in production. In a simple model exploiting comparative advantage, however, we show that if less educated foreign and native-born workers specialize in performing different tasks, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure. We merge occupational task-intensity data from the O*NET dataset with individual Census data across US states from 1960-2000 to demonstrate that foreign-born workers specialize in occupations that require manual and physical labor skills while natives pursue jobs more intensive in communication and language tasks. Immigration induces natives to specialize accordingly. Simulations show that this increased specialization might explain why economic analyses commonly find only modest wage and employment consequences of immigration for less educated native-born workers across US states.

Highly Educated Immigrants and Native Occupational Choice

Economic debate about the consequences of immigration in the US has largely focused on how influxes of foreign-born labor with little educational attainment have affected similarly-educated native-born workers. Fewer studies analyze the effect of immigration within the market for highly-educated labor. We use O*NET data on job characteristics to assess whether native-born workers with graduate degrees respond to an increased presence of highly-educated foreign-born workers by choosing new occupations with different skill content. We find that highly-educated native and foreign-born workers are imperfect substitutes. Immigrants with graduate degrees specialize in occupations demanding quantitative and analytical skills, whereas their native-born counterparts specialize in occupations requiring interactive and communication skills. When the foreign-born proportion of highly-educated employment within an occupation rises, native employees with graduate degrees choose new occupations with less analytical and more communicative content.

STEM Workers, H-1B Visas, and Productivity in US Cities

Science, technology, engineering, and mathematics (STEM) workers are fundamental inputs for innovation, the main driver of productivity growth. We identify the long-run effect of STEM employment growth on outcomes for native workers across 219 US cities from 1990 to 2010. We use the 1980 distribution of foreign-born STEM workers and variation in the H-1B visa program to identify supply-driven STEM increases across cities. Increases in STEM workers are associated with significant wage gains for college-educated natives. Gains for non-college-educated natives are smaller but still significant. Our results imply that foreign STEM increased total factor productivity growth in US cities.

Quotas and Quality: The Effect of H-1b Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad

In October 2003, the United States drastically reduced the number of H-1B visas available for foreign-born workers. Such restrictions could make U.S. colleges less attractive to foreign students considering an American education as a pathway to U.S. employment. Citizens from five countries are de facto exempt from the visa restrictions, however. Our difference-in-difference estimates show that restrictive immigration policy reduced SAT scores of international applicants by about 1.5% and decreased the number of SAT score reports sent by international students at the top quintile of the SAT score distribution. Restrictive immigration policy disproportionately discourages high-ability international students from pursuing education in the United States.

The Short‐ and Long‐Run Determinants of Less‐Educated Immigrant Flows into U.S. States

We use a gravity model of migration and alternative estimation strategies to analyze how income differentials affect the flow of immigrants into U.S. states using annual data from the American Community Survey. We add to existing literature by decomposing income differentials into short- and long-term components and by focusing on newly arrived less-educated immigrants between 2000 and 2009. Our sample is unique in that the vast majority of our observations take zero values. Models that include observations with zero-flow values find that recent male immigrants respond to differences in (short-term) GDP fluctuations between origin countries and U.S. states, and perhaps to (long-term) trend GDP differences as well. More specifically, GDP fluctuations pull less-educated male immigrants into certain U.S. states, whereas GDP trends push less-educated male immigrants out of their countries of origin. Effects for less-educated women are less robust, as GDP coefficients tend to be much smaller than for men.

The effect of legal status on immigrant wages and occupational skills

ABSTRACT Native and foreign-born workers with a high school degree or less education work in different types of occupations. This article exploits the 1986 Immigration Reform and Control Act to examine whether legal status causes immigrants to work in occupations that use skills similar to those of natives. Legal status decreases the manual skill intensity of immigrants’ occupations by about two percentiles. It increases communication skill intensity by a similar amount. This reduces the skill gap between Mexican-born and native-born American workers by 11–15%.

Choosing Skilled Foreign-Born Workers: Evaluating Alternative Methods for Allocating H-1B Work Permits

The H†1B program allows highly educated foreign†born labor to temporarily work in the United States. Quotas restrict the number of H†1B recipients. In many years, all available work permits were allocated by random lottery. This paper argues that an alternative distribution method based upon ability would increase output, output per worker, and wages paid to less†educated workers. Baseline estimates suggest that a change in allocation policy could result in a

The effect of the H-1B quota on the employment and selection of foreign-born labor

26.5 billion gain for the economy over a 6†year period. This estimate grows when H†1B demand rises.

Chapter 1 - Migration Theory*

The H-1B program allows skilled foreign-born individuals to work in the United States. The annual quota on new H-1B visa issuances fell from 195,000 to 65,000 for employees of most firms in fiscal year 2004. However, this cap did not apply to new employees of colleges, universities, and non-profit research institutions. Additionally, existing H-1B holders seeking to renew their visa were also exempt from the quota. Using a triple difference approach, this paper demonstrates that cap restrictions significantly reduced the employment of new H-1B workers in for-profit firms relative to what would have occurred in an unconstrained environment. Employment of similar native workers in for profit firms did not change, however, consistently with a low degree of substitutability between H1B and native workers. The restriction also redistributed H-1Bs toward computer-related occupations, Indian-born workers, and firms using the H-1B program intensively.

Assessing inherent model bias: An application to native displacement in response to immigration

This chapter provides a comprehensive expository survey and synthesis of the theoretical determinants of migration. Early work beginning with Adam Smith, running through the pioneering research of Larry Sjaastad in the 1960s, and continuing through the end of the twentieth century established the broad themes that persist in the literature. Migration is an act of human capital investment. Whether migration occurs across internal or international borders is largely irrelevant from a theoretical standpoint, as both types of flows are primarily driven by a desire to exploit geographic variation in the return to labor. We go on to show that while the earliest models treated migration as a static decision determined by exogenous wages that vary across different levels of human capital, more recent models emphasize the endogenous and dynamic nature of the migration decision and wages. We conclude the chapter with suggestions of further extensions of the human capital/migration model.