President Donald Trump has been trying to encourage firms to hire more American workers by increasing restrictions on visas for skilled foreign workers, including by suspending the H-1B visa program in June.
But a new study found that blocking out skilled labor actually encourages companies to move jobs abroad, where they can hire locally or more easily obtain a visa. That means more new jobs in countries like Canada, India, and China, not in the US, as president Donald Trump has claimed.
"It's not that a company really only has two options, which is either hire an immigrant in the US or hire an American in the US," said Britta Glennon, the National Bureau of Economic Research economist who wrote the study. "They actually have more options than that."
Glennon looked at data from millions of H1-B applications and multinationals' employment in foreign countries over a 10-year period to track whether less access to visas changed hiring practices. She found that it did, whether it was because the US lowered its annual visa cap (as it did in 2004,) or because visas became harder to get after US Citizenship and Immigration Services implemented a lottery system to grant them.
When she looked at the lottery's effects, for example, she found that for each visa application denied, companies created the equivalent of .3 jobs abroad, at least.
Companies in the tech sector were more likely to hire a foreign worker at their offices outside the US. They were also more likely to place those workers in Canada, which has less restrictive visa policies than the US, as well as India and China, where many of the hires were from.