Michael Clemens — How U.S. visas affect skilled labor: A randomized natural experiment

Michael Clemens — How U.S. visas affect skilled labor: A randomized natural experiment
[podcast]http://ccis.ucsd.edu/audio/Michael_Clemens.mp3[/podcast]

Please listen (above) to the Research Seminar given by Michael Clemens on March 9th, 2010. We also encourage you to subscribe to our CCIS Podcast and listen to all of our research seminars for free!


What are the effects of migration visas to rich countries on workers in poor countries? Though enormous international gaps in wages suggest that these effects could be large, the rarity of exogenous visa provision makes the true effects of visas difficult to measure. This study exploits a natural experiment wherein temporary US work visas were randomly allocated among a population of Indian high-tech workers in 2007 and 2008. It uses the experiment to test a set of predictions arising from economic theories of international migration: predictions relating to the effects of migration policy on migrants’ location choice, workers’ earnings, and foreign employers’ productivity. First, it finds that—contradicting a core assumption of the most common location choice models—choices depend heavily on the set of location options available. Policy limits on high-skill Indian labor to the US cause about 30% of those workers to go to other countries competing with the US for talented labor, including Western Europe, China, Singapore, and Japan, in a proportion far exceeding the relative sorting of migrants between India and those alternative destinations in the presence of the US option. Second, it provides an experimental estimate of the degree of selection on unobservable determinants of earnings for one group of temporary high-skill migration to the United States. Third, it offers evidence on the static and dynamic effects of spatial agglomeration economies on worker productivity.

Michael Clemens leads the Migration and Development Initiative at the Center for Global Development (CGD), where he studies the effects of international migration on people from and in developing countries. Michael joined the Center after completing his PhD in Economics at Harvard, where his fields were Development and Public Finance, and he wrote his dissertation in Economic History. In addition to his research at CGD he serves as an Affiliated Associate Professor of Public Policy at Georgetown University.