Association for Public Policy Analysis & Management

Over the past few decades, an increasing reliance on high-skilled immigrant workers by the U.S. economy has incurred considerable public debate on whether more liberalized immigration policies should be implemented to further ease the employment and job-transition process of skilled immigrant workers. One concern stems from the fact that high skilled immigrant workers on temporary work visas, such as H-1Bs and L-1s, may be “locked” to their sponsoring firms as “indentured servitude”. The firm sponsorship requirement of these visa programs may tie workers on these visas to their employers because the sponsorship incurs additional costs on the firms, thereby lowering the overall demand for these guest workers. Another source of the constraint stems from the supply side that guest workers who are transitioning to permanent residents are often reluctant to leave their employers because they cannot switch jobs without losing their position in the long waiting list for a green card. Restricted labor mobility is thought to cause economic inefficiencies. In addition to impeding better worker-employer matches, these mobility constraints may also put downward pressure on the wages of both immigrant workers and their native-born counterparts. To inform relevant policy remedy designs, this study empirically documents the job mobility patterns of skilled foreign-born workers, which fills a crucial gap in the existing economics literature.

Using the National Survey of College Graduates, this paper compares the voluntary job-to-job transition patterns of skilled immigrant workers with their native counterparts. I find that these temporary professionals are indeed slightly less mobile than comparable native-born workers. Permanent residents and naturalized citizens, however, both have persistent higher probabilities to voluntarily switch employers than their native-born counterparts, even with full covariates. Empirical evidence on the reasons for these workers’ job moves points to three hypotheses: family ties, the difficulty of intra-firm promotions and the conjecture that these foreign-born workers start their career with reservation wages lower than natives, and therefore better labor market alternatives are more likely in the future.

This article also examines the effect of obtaining permanent resident status on the job mobility rate of workers initially on temporary work visas. An individual fixed effects model documents a 66% spike in the job mobility rate of immigrant workers immediately following their receipt of permanent residency, suggesting a significant and sizable institutional “job lock”. The pooled OLS regressions indicate a demand side restriction up to 27.8%, and a supply side effect of at least 25.4%. The lower bound of the supply side constraint suggests that policy remedies should undoubtedly target the regulations on employment-based green card applications, but the design of these remedies would depend on a complete cost-benefit analysis.