ESSAYS ON HIGH-SKILLED MIGRATION

Abstract

This dissertation is comprised of three essays that focus on high‐skilled migrations and how these are influenced by public policy and their economic impacts. The first essay links finance theory to labor economics and political economy in the context of migration and immigration policy. Using event study analysis, I measure the impact of immigration policy on the profit of employers and shareholders, in particular the American Competitiveness and Workforce Improvement Act (ACWIA) of 1998 nearly doubled the available number of H‐1B visas for skilled foreign workers in FY 1999. The empirical results show that top H‐1B visa user industries enjoyed significant and positive excess returns with the passage of the ACWIA of 1998, while industries with little need for H‐1B visas experienced no significant changes. Robustness checks including international comparisons, nonparametric modeling and a sample‐split Chow structural break test support the results. In the second essay, I investigate the findings of the first essay by employing two multi‐factor models—Fama‐French three‐factor model and Fama‐French‐momentum four‐factor model. Fama and French (1993) claim that the three‐factor model does a better job isolating the firm‐specific components of returns. In contrast, Campbell, Lo and Mackinlay (1997) argue that in practice the gains from employing multi‐factor models for modeling the normal returns are limited. The results support the point of Campbell, Lo and Mackinlay (1997). In the third essay, I use microdata on immigrants from the 1990 and 2000 U.S. censuses to examine the growing earnings differentials between foreign‐born Taiwanese and all other foreign‐born immigrants. By decomposing the earnings gap, I show that over one‐third of this gap (36% in 1990, 37% in 2000) can be attributed to the better endowment (higher education) of the Taiwanese. Among foreign‐born Taiwanese from 1960 to 1999, 60% of the master degrees, 80% of the professional degrees and 92% of the doctorate degrees were earned in the United States. The growing numbers and rising percentage of U.S. earned degrees among the Taiwanese indicate their higher earnings relative to other immigrants in 1990 and 2000 can be attributed to their successful economic assimilation into the United States.%%%%%%%%