Essays in international migration

Marcelo J Castillo, Purdue University


This dissertation consists of three essays examining the effects of high-skilled immigration on various economic outcomes within the receiving country. In the first essay, I study how skilled immigrants affect wages and employment in US industries during 1995-2007, using novel microdata on approved H-1B visas. These data show that most H-1B employers specialize in the production of high-skilled services used as inputs by other businesses. In light of this, I consider the downstream effects of skilled immigrants on industry labor market outcomes: how wages and employment in an industry respond to immigration shocks to its suppliers. The identification strategy relies on large policy changes to the annual limit on H-1B admissions. I find that higher admissions lead to higher mean wages in exposed downstream industries. Also rising with downstream exposure are the wages of high-skilled, STEM, and low-skilled workers, and the employment of high-skilled and STEM workers. These findings indicate that higher admissions increase average wages by increasing worker compensation but also by changing the composition of employment in exposed industries. While immigration status is not observable in my data, my estimates suggest that higher admissions benefit US native workers because exposed downstream sectors hire few immigrants. In the second essay, I use the administrative data mentioned above to examine how skilled immigrants affect the employment prospects of young skilled natives in US states during 2000-2009. My identification strategy uses a decline in the supply of visas to a state caused by (1) changes in national immigration policy, and (2) tougher competition in the market for visas as demand by the largest H-1B employer increased dramatically. I show robust evidence that increased hiring of skilled foreign workers lowers employment of young college-educated natives. Consistent with previous work, I find no effect on total college-educated employment. In the last chapter, I consider how rising skilled immigration during 1995-2007 affected service offshoring in US industries. Using the H-1B microdata, I document a large increase in the employment of skilled immigrants in tradeable service sectors during 1995-2007. Because skilled immigration may be endogenous to offshoring, I develop instruments that use variation in H-1B inflows that depend on (1) the annual limit on H-1B admissions set by government policy and (2) US macroeconomic conditions. These national shocks have differential effects across industries because some industries are always more exposed to skilled immigration than others. I find that higher skilled immigrant flows lead to higher offshoring in highly exposed industries.




Xiang, Purdue University.

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