Restricting Visas Leads to Offshoring

Here's an earlier version of the paper, which is public: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3547655

2 excerpts from that version:

> Translating these coefficients into the number of jobs offshored, I find that about 0.3 foreign affiliate jobs were created for every unfilled H-1B position.

> …

> I utilize two identification strategies, the first of which exploits the 2004 drop in the H-1B visa cap, while the second exploits variation in firm-level excess demand from the H-1B visa lotteries in high demand years. Both strategies yield the same result: that foreign affiliate employment increased as a direct response to increasingly stringent restrictions on H-1B visas. This effect is driven on the extensive and intensive margins; firms were more likely to open foreign affiliates in new countriesin response, and employment increased at existing foreign affiliates. The effect is strongest among R&D-intensive firms in industries where services could more easily be offshored. The effect was somewhat geographically concentrated: foreign affiliate employment increased both in countries like India and China with large quantities of high-skilled human capital and in countries like Canada with more relaxed high-skilled immigration policies and closer geographic proximity.