The effect of low-skill immigration restrictions on U.S. firms and workers: Evidence from a randomized lottery

Last registered on October 01, 2025
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Pre-Trial

Trial Information

General Information

Title
The effect of low-skill immigration restrictions on U.S. firms and workers: Evidence from a randomized lottery
RCT ID
AEARCTR-0016896
Initial registration date
September 27, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 01, 2025, 8:02 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region
Nationwide

Primary Investigator

Name
Michael Clemens
Affiliation
George Mason University
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Other Primary Investigator(s)

PI Name
Ethan Lewis
PI Affiliation
Dartmouth College
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Additional Trial Information

Status
Completed
Start date
2021-10-21
End date
2023-04-25
Keywords
Firms & Productivity, Labor
Additional Keywords
immigration, immigrant, substitution, h-2b, guest worker, temporary, visa, revenue, profit, native, jobs, employment, foreign
JEL code(s)
F22, J61, D22
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
The U.S. Department of Labor runs a lottery to allocate temporary work visas (called H-2B visas) for jobs that do not require a college education and are outside of agriculture. Each year, employers request far more visas than the legal cap allows. To make the visa allocation fair, the Department of Labor randomly assigns petitions to processing groups labeled A, B, C, and so on. Petitions in the earliest group (“A”) are almost guaranteed to be processed before the cap is reached, while later groups have a much smaller chance. Because the assignment to these groups is random, it creates a natural experiment: some firms are randomly given the ability to hire more foreign workers, while otherwise similar firms are not.

This setup allows the present study to compare the outcomes of firms who “won” the lottery to those who “lost,” as assessed in a novel firm survey, isolating the causal effect of restricted or expanded access to low-skill immigrant labor. It is not a designed randomized controlled trial, but rather studies the result of an existing, naturally randomized administrative process within the US government. The core outcomes and subgroup analysis were fixed by a pre-analysis plan irreversibly posted before the firm survey began. The pre-analysis plan is available at: https://osf.io/zdyun

The initial results from analysis of the firm survey are available in the NBER Working Paper based on this study: http://doi.org/10.3386/w30589
External Link(s)
Pre-Analysis Plan posted before data collection
NBER Working Paper 30589

Registration Citation

Citation
Clemens, Michael and Ethan Lewis. 2025. "The effect of low-skill immigration restrictions on U.S. firms and workers: Evidence from a randomized lottery." AEA RCT Registry. October 01. https://doi.org/10.1257/rct.16896-1.0
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Experimental Details

Interventions

Intervention(s)
This study did not design or carry out an intervention. For its own administrative reasons, the US Department of Labor randomizes the order in which petitions for Foreign Labor Certification for US firms to hire workers on the H-2B visa are processed. That is, the randomized trial consists of natural randomization by a US government agency, a process that arose with no intervention by the investigators in this study. The investigators collected survey data on firms that entered this naturally randomized lottery.
Intervention (Hidden)
Intervention Start Date
2021-10-21
Intervention End Date
2023-04-25

Primary Outcomes

Primary Outcomes (end points)
The principal outcomes, as specified in the Pre-Analysis Plan, were firm-level revenue and firm-level hiring of low-skill US workers.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
The secondary outcomes, as specified in the Pre-Analysis Plan, were firm-level investment and firm-level year-on-year percentage change in profits.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The Dept. of Labor's randomized intervention was to assign a letter (A, B, C, etc.), chosen by lottery, to each firm's petition for hiring workers under this visa. It then processed those petitions in the order given by the letter: A petitions first, then B, then C, and so on. This had the knock-on effect of limiting access to the visas for firms that did not receive letter A in the lottery, because all petitioning firms were competing for a fixed quota of visas that rapidly ran out.
Experimental Design Details
Randomization Method
Randomization was carried out by the Department of Labor, in an internal process. It is carried out on a computer, but the agency does not specify the precise method that it uses.
Randomization Unit
Randomization is at the level of petitions, not firms.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
We could not plan for a specific sample size, because the sample size depended heavily on the response rate. In the event, for the January 2021 lottery the universe was 5,376 petitions and the sample represented 477 petitions. For the January 2022 lottery the universe was 7,877 petitions and the sample represented 357 petitions.
Sample size: planned number of observations
The regressions are carried out at the firm level. Combining the data on firms in a pooled sample from the 2021 and 2022 lotteries, 472 firms were the basis for the empirical results.
Sample size (or number of clusters) by treatment arms
We use the natural randomization to construct two different instrumental variables, only one of which lends itself to the dichotomous 'treatment/control' suggested by this question. For that instrument, the fraction of 'winners' is 0.314, implying a 'treatment' sample of 0.314 * 472 = 148 firms, and thus a 'control' sample of 324 firms.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Dartmouth College Committee for the Protection of Human Subjects
IRB Approval Date
2021-10-21
IRB Approval Number
#STUDY00032360
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
April 25, 2023, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
April 25, 2023, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
834 petitions, in the two years combined
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
472 firms
Final Sample Size (or Number of Clusters) by Treatment Arms
148 firms in the sample of 472 are classified as "winning" the lottery, 324 are classified as "losing".
Data Publication

Data Publication

Is public data available?
No

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Program Files

Program Files
Yes
Program Files URL
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
U.S. firms face a binding quota on visas to employ foreign workers in low-skill occupations outside of agriculture. The government allocates this quota to firms in part through a randomized lottery. We evaluate the marginal impact of the quota on firms entering this lottery in 2021 and 2022, using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants in low-skill jobs significantly increase production (elasticity 0.20–0.22), investment (1.5–2.1), and the rate of profit (0.15). Because the foreign-native elasticity of substitution in production is very low in the policy-relevant occupations (0.8–2.2), the effect on native employment is zero or positive overall, and positive in rural areas. Forensic analysis suggests similarly low substitutability of black-market labor.
Citation
Clemens, Michael A., and Ethan G. Lewis. The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery. No. w30589. National Bureau of Economic Research, 2024 (revision of 2022).
URL
http://doi.org/10.3386/w30589

Reports & Other Materials