Rethinking Guestworker Migration Policy: Empirical Analyses of the H-1B Visa Origins and Labor Market Impacts

Session Submission Type: Panel

Abstract

America’s largest, most important, and most controversial skilled temporary worker program is undergoing a radical restructuring.  With more than 600,000 H-1B visa holders working in the U.S., it has become a major source of skilled workers for the technology and health industries. It also serves as an important “bridge” to permanent immigration for skilled workers. ↵
Although the “intent of the H-1B provisions is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce…,” an Executive Proclamation in September 2025 concluded that, instead, the H-1B program “has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor.” ↵
The administration imposed a $100,000 fee on employers of certain H-1B visa recipients, changed visa lottery allocations to favor higher-skilled and higher-paid workers, and increased program enforcement. Further, proposed rulemaking would significantly raise the minimum wages of H-1B workers. ↵
These are the most significant changes since the H visa was created over 70 years ago.  Are these changes warranted? Will they improve program outcomes? Or will they hobble key sectors of the U.S. economy? ↵ 

The panel includes three empirical analyses of the program along with two discussants: a noted labor market economist and a policy analyst from a leading think tank. It is chaired by an editorial board member of a leading financial news organization. ↵ 
An historical analysis by Hal Salzman examines the rationale for the original H-1 non-immigrant skilled worker program.  Designed to allow the employment of professional/technical workers who were ineligible for immigration status, it became a permanent source of employment for some industries. Institutionalized, it forestalled, rather than promoted, policies to increase the domestic supply of workers in those sectors.↵ 
George Borjas measures the labor market impact of the H-1B program. Using newly available data, he finds a significant wage gap, with H-1B workers being paid, on average, 16 percent less than comparable U.S. workers. Employers’ wage savings over the duration of the visa will exceed the $100,000 fee; employers truly facing shortages can still hire this supply of skilled labor, offsetting the cost through wage savings.↵ 
Ron Hira traces the history, development, and expansion of the H-1B Outsourcing Business Model, and the policies designed to curb it. These firms employ practices designed to exploit the program for wage arbitrage. Such firms play an outsized role in the program, receiving between 30 and 50 percent of all new visas. Their practices receive widespread media attention and make them a target for specific policy reforms.↵
 Discussant Richard Freeman will discuss how these papers advance our understanding of immigration and scientific and technical labor markets.  ↵ 
Discussant Oren Cass will discuss the politics and policy implications. ↵ 
The chair is journalist Rachel Rosenthal, a member of Bloomberg News’ editorial board.

Policy Area

• Population and Migration Issues

Chair

• Rachel Clare Rosenthal, Bloomberg

Discussants

• Richard B. Freeman, Harvard University

• Oren Cass, American Compass

Organizer

• Hal Salzman, Rutgers University

Individual Presentations

• A Most Peculiar Plan: The Origins and Troubled History of High-Skilled Guestworker Programs - Presenting Author: Hal Salzman, Rutgers University

• The H-1B Outsourcing Business Model: A Target for Policy Reforms - Presenting Author: Ron Hira, Howard University

• Wages at the Floor: Bunching in the H-1B Program - Presenting Author: Jesús Villero, University of Pennsylvania