If firms cannot hire foreign workers for low-skill jobs, do they hire local ones instead?
The Effect of Low-Skill Immigration Restrictions on U.S. Firms and Workers: Evidence from a Randomized Lottery
Michael A. Clemens, Ethan G. Lewis (2026) · American Economic Journal: Applied Economics
Article ↗ · Replication data ↗ (openICPSR)
The archive requires an account we do not hold, so the files were not opened. What follows rests on the published abstract and on this platform's own observations.
What the authors found
Clemens and Lewis exploit the randomised lottery that allocates part of the US H-2B visa quota — as clean an experiment as this literature gets. Firms that randomly received more H-2B workers increased production, investment and profits. The elasticity of substitution between H-2B and US workers is very low, between 0.8 and 2.2, so restricting the visa does not push firms toward domestic hires: the effect on US employment is zero or positive overall, and positive in rural areas.
What our data adds
The scale of foreign-born presence varies enormously among rich economies, and the countries usually held up in this debate are not the extremes. Among economies with more than five million residents, the United Arab Emirates has a foreign-born share of 74.0 per cent, Singapore 48.7, Jordan 45.7, Saudi Arabia 40.3, Switzerland 31.1 and Australia 30.4. The United States, the setting for this paper and for most of the political argument, is well below all of them. Whatever the H-2B quota is doing, it is not holding back a uniquely high level of foreign labour by international standards.
Small states dominate the top of this ranking; the note discusses only economies above five million.
| Figure | Value | Indicator |
|---|---|---|
| United Arab Emirates, foreign-born share | 74.0% | SM.POP.TOTL.ZS |
| Singapore | 48.7% | SM.POP.TOTL.ZS |
| Switzerland | 31.1% | SM.POP.TOTL.ZS |
| Elasticity of substitution, H-2B and US workers (paper) | 0.8-2.2 | SM.POP.TOTL |
Every figure here is computed from observations in this database and can be charted, downloaded or queried.
What this cannot show
Migrant stock counts residents born abroad, which includes people who arrived decades ago and naturalised, and excludes seasonal workers who do not establish residence — so it is close to the wrong measure for a temporary work visa. The Gulf figures reflect a labour system with almost no path to citizenship, which makes the comparison with Switzerland or Australia less meaningful than the shared number suggests. The paper's result is causal and experimental; nothing here bears on it.
The data behind it
International migrant stock, total
SM.POP.TOTL
WBInternational migrant stock (% of population)
SM.POP.TOTL.ZS