Commenters dig into the study's substitution elasticity findings
3 Sep 21 2:06 AM · 5d ago · 8 comments · 1 source · development 3 of 3
HN commenters parse the paper's estimate that H-2B and US workers are poor substitutes (elasticity 0.8–2.2, versus 4–10 in comparable studies), and debate whether 'low-skill' is a misleading technical term and whether the reported capital investment gains reflect capital-labor substitution.
“I feel like the wording "low-skill" has become a technical term that doesn't mean what the word says and it makes people make assumptions they shouldn't with…”
collabs, HN commenter · hn ↗Michael A. Clemens Study co-author, economistEthan G. Lewis Study co-author, economistUS Department of Labor Agency administering the H-2B visa lottery
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# USA immigration, the real deal The evidence indicates a marginal increase in H-2B visas would expand production, investment, and profits at US firms without reducing USAian employment. The authors caution their short-run estimates may even understate the gains: chronic visa uncertainty makes firms underinvest, and related work (Census Bureau…
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> The results suggest that low-skill foreign and low-skill American workers are poor substitutes for one another. The authors' estimates put the elasticity of substitution between H-2B and US workers at roughly 0.8 to 2.2, far below related studies of immigrants in low-skill work, which typically find an elasticity of 4 to 10, and nowhere near the…
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> Firms that won and could hire all the foreign workers they sought saw revenue rise with an elasticity of approximately 0.20, meaning a doubling of H-2B employment raised revenue by about a fifth. Investment in equipment, vehicles, and structures responded even more strongly, with an elasticity of 1.5 to 2.1.The "investment in equipment…
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Sometimes they are lies. Governments including Western ones have lied before (e.g. Tuskegee Syphillis), and academics have published flawed, misleading, or straight-up fabricated studies (e.g. “landmark” Alzheimer’s study).But more often, the “fact” does not address the individual’s issues, and the individual may give a stupid counterargument…
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> Equally striking is what did not happen. Employment of low-skill American workers at losing firms did not increase. Across all firms the effect of foreign hiring on US employment was zero or positive, and in a prespecified subsample of rural firms it was significantly positive, with an elasticity of 0.61, meaning that for every one percent…
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From all I know, a firm bringing H-2B (farm labor) to an actual farm is what an H-1B bodyshop to a software development shop: it does not produce any farmed goods and its customers are farmers, who don't have legal departments. It's a middle man. A surprising finding would have been if such a firm started to hire Americans all of sudden: how would…
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The lottery is what makes this unusually interesting. A lot of immigration/labor studies get stuck on the obvious selection problem: firms that hire immigrant workers are probably different from firms that don't in a dozen other ways.
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My friend was saying that we just need to show people the facts to change their minds. I showed him a pile of scientific studies indicating that it doesn't work. His response was "I still think it'll work"!
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I'm still hung up on how the $100K requirement for H1B visas is extended to Sep '27. The US has always been, is and will likely continue to be a magnet for the brightest out there to come and work. Why hamper it?
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Pure luck of the draw. Knew a dev who got it, and it completely changed his career trajectory – pretty wild.
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Finally a The Thick of It reference in HN.An AUS Utopia reference would probably be more fitting though.
All 3 developments of Study: Losing the H-2B Visa Lottery Shrinks Firms, Doesn't… →
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