Should H-1B Visas Be Randomly Allocated?

January 15, 2019

The H-1B Visa program, in its current design, has one notable feature: visas are allocated randomly, by a lottery system, to those who are eligible for it. This is in part because there is a cap on the number of visas that may be approved in a given year, to help control the amount of legal immigration and employment opportunities for natives. But, what are some of the consequences of this system, and is an alternative a better solution for visa allocation?

Chad Sparber from Colgate University examined the possibility of a merit-based allocation system for H-1B visas. While explicitly taking no stance on whether the number of visas should be adjusted, Sparber did argue that the distribution of visas might be better if they prioritized those applications which were getting the best offers in terms of salary and compensation. Sparber was curious how such a system would impact the overall increase in productivity.

His models and simulations ultimately concluded that switching the allocation system would cause the overall skill level of H-1B visas recipients to rise dramatically, as would overall output and output per capita. Additionally, he found that native workers without bachelor’s degrees would have greater opportunities and benefits, though native workers with bachelor’s degrees would suffer from a slight wage decrease. It remains to be seen whether this distribution system will be seriously considered by law-markers, but it would be an interesting and potentially worthwhile change.

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Citation: Sparber, C. (2018). Choosing Skilled Foreign-Born Workers: Evaluating Alternative Methods for Allocating H-1B Work Permits. Industrial Relations, 57, 3–34.

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