This article is more than 1 year old

President Trump's H-1B visa crackdown wiped $100bn off market value of America's largest corps, top study finds

White House immigration restrictions knock less than half a per cent off

The Trump administration's June crackdown on foreign workers with H-1B and other visas wiped $100bn off the stock market value of the largest US companies, according to boffins at The Brookings Institution, Harvard Business School, and The Wharton School of the University of Pennsylvania.

In a research paper distributed by the National Bureau of Economic Research, authors Dany Bahar (Brookings), Prithwiraj Choudhury (Harvard), and Britta Glennon (Wharton) analyzed the market capitalization of 471 Fortune 500 companies before and after the President's Executive Order (EO) banning certain foreigners from entering the States, to track changes in those corporations' cumulative average abnormal returns.

"Our baseline results show that in the days that followed the EO, the firms in our sample – known to rely extensively on immigrant labor – lost about 0.45 per cent of their value based on abnormal stock returns," the paper says.

Given a collective valuation for the group of about $22.68tr, that amounts to the loss of about $100.14bn for the economy overall.

In a phone interview with The Register, Bahar said while there's already evidence that limiting access to foreign workers is economically harmful over the long term, he and his colleagues wanted to look at the short-term impact.

US visa illustration

President Trump to slap fresh restrictions on H-1B work visas, refuses to hear public comment on changes


One of the things the team wanted to check is whether the anti-immigrant rhetoric from the White House is taking a toll on the economy, said Bahar. He said there's aleady evidence of that over the long term and, now, in the short term too.

"We found that these firms were hit very hard the day after by the market," he said. "These firms lost about 0.45 per cent of their value in one day."

And the effect, he said, persisted over the next ten days.

Asked about what this means for US immigration policy, Bahar emphasized that as academics, he and his colleagues were focused first and foremost on documenting the economic implications of the EO. He noted that the findings suggest the economic toll from limiting access to foreign talent is not just something that will show up over time but is evident right away.

Bahar did, however, observe that there's no evidence this sort of immigration policy will lead to more jobs for Americans. Firms deprived of immigrant labor don't necessarily react by hiring Americans, he said. Instead, they may turn to offshoring or automation.

In June, US Chamber of Commerce CEO Thomas Donohue said as much about the EO.

"Putting up a 'not welcome' sign for engineers, executives, IT experts, doctors, nurses and other workers won’t help our country, it will hold us back," he said. "Restrictive changes to our nation’s immigration system will push investment and economic activity abroad, slow growth, and reduce job creation."

Separately on Monday, 60 student government bodies and student unions representing over 850,000 students at 51 universities across the US wrote a letter [PDF] to Chad Wolf, Acting Secretary of the US Department of Homeland Security. The student groups oppose a rule revision proposed last month to limit non-immigrant student visa stays in the US to four years, or two years for students from Middle Eastern or African countries.

Given that the median time to complete a doctoral degree in the US is more than six years, the proposed student visa changes would require international doctoral students to apply for at least one extension. The student organizations argue the proposed rules would inflict substantial harm to the economy and to the US tech industry.

"About two-thirds of graduate students in electrical engineering and computer science, the top educational fields feeding into the US semiconductor industry, are international students," the letter says.

"Across all fields, NAFSA: Association of International Educators estimates using Department of Commerce data that during the 2018-2019 academic year alone, international students contributed $4bn to the US economy and created or supported 458,290 jobs."

Earlier this month, a judge in California issued a preliminary injunction that suspends the EO for certain trade groups and their members, based on a legal challenge they filed. And if Trump fails to win re-election in the upcoming US election on November 3, these policies aren't likely to survive. ®

More about


Send us news

Other stories you might like