Migrant Workers and Economic Resilience: Evidence from the 2020 H-2B Visa Lottery

• In Event: Minority and Immigrant Entrepreneurship

Abstract

How "essential" are foreign-born workers to local economic resilience? The COVID-19 pandemic brought this question to the fore, yet policymakers entered 2020 with little quantitative evidence on the degree to which firms and local economies rely on low-wage, migrant workers. This uncertainty clouded policy decisions at the time, as reflected in the tension between closing off the border to prevent the spread of the virus and allowing migrant workers into the country to perform tasks deemed vital to the economy. Understanding the degree to which migrant workers sustain economic activity is critical for designing labor market and immigration policies that can withstand future shocks. 

In this paper, I provide well-identified evidence on this question. To do so, I combine detailed information on firm-level usage of the H-2B visa program from the Department of Labor (DoL) with administrative records on firm survival, payroll, employment, and revenues from the U.S. Census Bureau. I then study the 2020 H-2B visa lottery, which randomly assigned participating employers---over 95\% of which were classified as ``essential'' by state and local orders---the opportunity to hire foreign-born workers starting on April 1, 2020. This unique combination of data and experimental variation allows me to quantify both the direct effects of H-2B access on lottery applicants and spillover effects on non-applicant firms along local supply chains. I find that temporary migrant workers can help stabilize outcomes of both their employers and those of downstream businesses that depend on them.

Author

• Parag Mahajan, University of Delaware
  Presenting Author