Undervaluing Skilled Immigrants

Hao Jiang, Christopher A. Parsons, Lin Sun, and Sheridan Titman

♦ Firms employing more H-1B visa holders realize abnormally high stock returns, particularly on earnings announcement dates. Excess returns are higher in talent clusters: doubling the number of H-1B workers in a city doubles the effect of a firm’s own H-1B hiring on its future returns. The surprise election of President Trump in 2016 had an immediate, negative effect on firms benefiting from the H-1B visa program. The results suggest that the stock market was slow to recognize value creation associated with skilled immigrant labor.

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