“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
“Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
AI Summary.An analysis of authors at a leading AI research conference finds China is the largest originating source of elite AI talent, with its share of researchers holding Chinese undergraduate degrees rising 11 percentage points to 57%, while the US share fell to 13%. The US remains a net importer of AI researchers, gaining 2,145 while China lost 1,729.
Damien Ma and Binyi YangCarnegie Endowment for International Peace
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Surveying education/employment histories of authors at the Neural Information Processing Systems conference, Ma and Yang infer China educated 57% of elite AI talent as of 2025, versus 13% for the US. Yet the US gained 2,145 researchers y/y while China lost 1,729.
Does China produce the most elite AI talent while America attracts it?
Core argument: Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.
[Using a methodology based on paper authors from the Neural Information Processing Systems conference (NeurIPS) Damien Ma and Binyi Yang find] China has established a commanding lead as the largest originating source of elite AI talent globally. Compared to 2022, the share of Chinese-origin AI talent, defined as those who received undergraduate degrees in China, increased 11 percentage points to 57% in 2025, while the U.S. share fell to 13%. The United States remains a magnet for global AI talent, particularly Chinese talent. Despite U.S.-China tensions, among AI researchers working in the United States, the 2025 share of those holding undergraduate degrees from China rose by 4 percentage points. When it comes to brain gain vs. brain drain, the United States saw a net gain of +2,145 researchers in 2025 while China registered a net loss of -1,729 researchers.
Takeaways by Macro Roundup® AI
Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.
Among AI researchers working in the United States, the share holding Chinese undergraduate degrees rose 4 percentage points in 2025, despite U.S.-China tensions.
The United States recorded a net gain of 2,145 AI researchers in 2025, while China registered a net loss of 1,729, under Ma and Yang’s methodology based on NeurIPS paper authors.
Related Articles:
China Lures Home Its Top AI Talent From Silicon Valley— Elite artificial intelligence researchers have left US firms including Google DeepMind and OpenAI for Chinese companies such as ByteDance, Tencent, and Alibaba. Three China- and San Francisco-based headhunters say they relocated more than 30 US-based researchers to China over 12 months, up from low single digits the prior year.
China and the Future Of Science— China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.
Why Europe Produces Nobel Prize Winners but Not Elon Musks— Europe trains more engineering graduates per capita than China and more STEM PhDs than any region outside the United States, yet the only EU-born companies to reach $100bn market value in the past fifty years, Spotify and BioNTech, listed on US exchanges. Europe captures 6% of global AI startup funding versus 61% for the United States.
AI Summary.Official Spanish data show births exceeded deaths by barely 200,000 over the first quarter of the 21st century—less than 0.5% of Spain's population at the start—while immigration accounted for 98% of the country's population growth, the largest increase of any European Union member. Deaths have exceeded births since 2015.
Nicholas EberstadtAmerican Enterprise Institute
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Btw 2000 and 2025, ~98% of Spain’s population growth was due to immigration. In 2024, about one-third of babies born in Spain had a foreign-born mother.
Has immigration accounted for nearly all of Spain's population growth?
Core argument: Immigration accounted for 98% of Spain's population growth between 2000 and 2025, according to official Spanish data.
Without immigration, Spain’s population would have stagnated in the first quarter of the 21st century. According to official Spanish data, births exceeded deaths by barely 200,000 for the 2000-2025 period (2025 numbers still provisional)—or less than one half of 1% of Spain’s 2000 population. Thanks to its robust immigration inflows, however, Spain registered more population growth than any other EU country between 2000 and 2025. Virtually all (98%) of Spain’s population growth was due to immigration during those years. And since deaths have exceeded births in Spain since 2015, any future growth would have to come entirely from additional immigration.
Takeaways by Macro Roundup® AI
Immigration accounted for 98% of Spain's population growth between 2000 and 2025, according to official Spanish data.
Spain's births exceeded deaths by barely 200,000 over 2000–2025, with 2025 figures still provisional, less than one half of 1% of Spain's 2000 population.
Spain registered more population growth than any other EU country between 2000 and 2025 on the strength of immigration inflows, and with deaths exceeding births since 2015, any future growth would have to come entirely from additional immigration.
Related Articles:
European Stagnation Is Real— Comparing the United States, France, and Germany at current purchasing power parity prices shows the European economies roughly constant relative to America since 2000, but current-price measures miss output gains in sectors where prices fall, such as software. The author argues constant-price comparisons, the standard approach for growth over time, reveal greater European stagnation.
Four Ways Europe’s Big Immigration Experiment Has Changed Spain— Spain has been the world's fastest-growing large advanced economy and, by Financial Times analysis, accounted for one in four of the 11.1mn jobs added across the European Union, with roughly 70% going to immigrants according to the think-tank Funcas. Spain's fertility rate of 1.1 births per woman is the EU's lowest after Malta.
Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come— Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
AI Summary.Spain has been the world's fastest-growing large advanced economy and, by Financial Times analysis, accounted for one in four of the 11.1mn jobs added across the European Union, with roughly 70% going to immigrants according to the think-tank Funcas. Spain's fertility rate of 1.1 births per woman is the EU's lowest after Malta.
Barney Jopson, Alan Smith and Irene de la Torre ArenasFinancial Times
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Spain’s foreign-born population grew from ~5% to ~20% in less than 25 years. Since 2020, ~25% of the 1.1mm new jobs created in the EU were Spanish, and ~70% were filled by immigrants. At 1.1 births/woman, Spain has the second-lowest birth rate in the EU.
How has immigration driven Spain's economic and job growth?
Core argument: Spain accounted for one in four of the 11.1mn jobs added across the EU since 2020, according to FT analysis, and has been the world's fastest-growing large advanced economy over the past two years.
Over the past two years, Spain has been the world’s fastest-growing large advanced economy and an engine of EU job creation. Since 2020, it has been responsible for one in four of the 11.1mn new jobs added across the bloc, according to FT analysis. Roughly 70% of those have gone to immigrants, according to Funcas, a think-tank, which has examined the period since 2019. Spain’s unemployment rate remained the second highest in the EU at 10.3% in March. Juan Félix Huarte, chair of Uriel Investments, whose businesses range from waste management to renewables, says immigrants have become vital for the country’s economy for two underlying reasons. One is Spain’s fertility rate of 1.1 births per woman, the lowest in the EU after Malta and little more than half the rate of 2.1 needed to maintain demographic stability. “The Spanish, unfortunately, don’t have children. We have pets, but we don’t have children,” Huarte says. The other reason, he says, is that many young Spaniards are disinclined to take arduous jobs: “We’re getting society far too used to government assistance, to grants, to support from the state.”
Takeaways by Macro Roundup® AI
Spain accounted for one in four of the 11.1mn jobs added across the EU since 2020, according to FT analysis, and has been the world's fastest-growing large advanced economy over the past two years.
Roughly 70% of Spain's job gains since 2019 have gone to immigrants, according to the think-tank Funcas, while Spain's unemployment rate stood at 10.3% in March, the second highest in the EU.
Spain's fertility rate of 1.1 births per woman is the lowest in the EU after Malta and little more than half the 2.1 needed for demographic stability, which Uriel Investments chair Juan Félix Huarte cites as one reason immigrants are vital to the economy.
Related Articles:
Euro Area Outlook 2026: Cyclical Boost, Structural Drag, Unchanged Rates— Euro area growth is forecast at 1.4% on a fourth-quarter-over-fourth-quarter basis, slightly above 1.3%, as German fiscal expansion and resilient consumer spending are offset by structural drags. The authors estimate China's export push will cut real GDP by 0.9% in Germany and 0.6% in Italy over four years.
The Demographic Future of Humanity: Facts and Consequences— The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
The Future of European Competitiveness – A Competitiveness Strategy for Europe— A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
AI Summary.A worker-quality index built from US household survey data stayed within 1% of its starting level despite a shift toward more immigrant workers, while official nonfarm business productivity rose 8.2%. Lower predicted wages among Central American arrivals were offset by European and Asian immigrants, whose predicted wages exceed the US-born average by about 20%.
Serdar Ozkan and Nicholas SullivanFederal Reserve Bank of St. Louis
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Labor productivity increased 8.2% over the 2023–2025 period, while a CPS-based measure of worker quality has stayed within 1% of its Q1 2023 level, despite significant changes in the immigrant-intensity of the labor force over the period.
Does a more immigrant-heavy workforce lower average labor productivity?
Core argument: The authors' CPS-based worker quality index stayed within less than 1% of its first quarter 2023 level across the three-year period, while BLS nonfarm business productivity rose 8.2% over the same span.
On net, the U.S. workforce became meaningfully more immigrant-heavy from 2023 to 2024 and then partially reversed, all within a three-year window. Despite these compositional changes, our CPS-based worker quality index barely moved. It hovered within less than 1% of its first quarter 2023 level throughout the entire period, while BLS nonfarm business productivity climbed 8.2% over the same span. Why would swings in workforce composition leave average productivity nearly unchanged? Two reasons. First, the shifts in employment shares by place of birth, while noticeable, are small in absolute terms. Even with a 1pp rise in the U.S. employment share of lower-productivity, Latin American-born workers moved the needle on aggregate worker quality only modestly—far less than the roughly 8% productivity gain recorded by the BLS over the period. Second, not all immigrants are less productive than U.S.-born workers. Central American immigrants—who accounted for the largest single increment of the foreign-born workforce share—earn wages that fall about 25% below the U.S.-born average. In isolation, their growing employment shares put modest downward pressure on average productivity. But workers arriving from Europe, Asia, and other high-income regions display the opposite pattern: Their predicted wages exceed the U.S.-born average by about 20%, reflecting higher educational attainment and more highly compensated occupations.
Takeaways by Macro Roundup® AI
The authors' CPS-based worker quality index stayed within less than 1% of its first quarter 2023 level across the three-year period, while BLS nonfarm business productivity rose 8.2% over the same span.
A 1 percentage point rise in the U.S. employment share of lower-productivity Latin American-born workers shifted aggregate worker quality only modestly, far less than the roughly 8% productivity gain recorded by the BLS.
Central American immigrants, the largest single increment of the foreign-born workforce share, earn wages about 25% below the U.S.-born average, while workers from Europe, Asia, and other high-income regions have predicted wages about 20% above it.
Related Articles:
An AI Productivity Boom? Don’t Count Your (Productivity Data) Chickens— Measured productivity can rise from compositional effects when lower-wage, lower-productivity workers leave the labor force, as happened during Covid and 2009, and immigration policy changes could produce a similar effect. Much of the recent productivity boost appears to come from capital utilization tied to increased investment in AI rather than workers becoming more productive using AI.
Macroeconomic Implications Of Immigration Flows In 2025 And 2026: January 2026 Update— The authors estimate that job growth consistent with full employment was 20,000–50,000 a month in the second half of 2025, while reported nonfarm payroll growth averaged about 14,500 and unemployment rose 0.3 percentage points. They project immigration policy changes will keep potential employment growth low, reducing GDP growth by roughly 0.2 percentage points in 2025 and 0.1 in 2026.
Trump’s Immigration Crackdown Fails to Deliver Jobs for US-Born Workers— Researchers at the American Enterprise Institute and the Brookings Institution estimate net migration into the US may have turned negative for the first time in at least 50 years. That decline coincided with rising joblessness among US-born workers, whose labor force participation has fallen in recent months to near its lowest level since 2021.
AI Summary.Census population estimates show urban counties growing more slowly than suburbs, smaller metropolitan areas, and rural areas, with all county types slowing as immigration fell and the slowdown especially sharp in urban counties. Domestic migration is driven more by affordability, with people leaving expensive urban counties for cheaper suburbs and smaller communities.
Jed KolkoJed Kolko Substack
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As immigration slowed in 2025, large urban counties’ growth continued to slow relative to that of suburban, rural and smaller urban counties. Domestic migration continued to consist of moves from expensive counties to more affordable suburban areas.
Does lower immigration slow urban county growth more than elsewhere?
Core argument: Urban counties grew more slowly in 2025 than suburban counties, smaller metropolitan areas, and rural areas, according to vintage 2025 Census population estimates.
Urban counties grew more slowly than suburban counties, smaller metropolitan areas, and rural areas in 2025. All types of counties grew more slowly in 2025 than in 2023 and 2024 because immigration fell. However, the slowdown was especially sharp for urban counties. The only other years this century when urban counties lagged all other types of places were in 2020-2022, when people moved out of cities during the pandemic, and in 2003-2006, when the housing bubble boosted housing construction in outlying suburban areas and drew new residents from cities. (This is based on vintage 2025 Census population estimates, released this morning.) Domestic migration is driven more by affordability, with people leaving expensive urban counties for more affordable suburban areas and smaller communities.
Takeaways by Macro Roundup® AI
Urban counties grew more slowly in 2025 than suburban counties, smaller metropolitan areas, and rural areas, according to vintage 2025 Census population estimates.
All county types grew more slowly in 2025 than in 2023 and 2024 because immigration fell, with the slowdown especially sharp for urban counties.
The only other years this century when urban counties lagged all other place types were 2020–2022, amid pandemic moves out of cities, and 2003–2006, when housing-bubble construction in outlying suburbs drew residents from cities.
Related Articles:
Where Americans Choose to Move and Where They Leave— County-level mapping of net domestic migration within the United States shows some counties gained net movers equal to 10% or more of their 2020 population while others lost an equivalent share, excluding international moves.
The Demographic Outlook: 2026 to 2056— The Congressional Budget Office projects the US population rises from 349m to 364m between 2026 and 2056, with annual growth slowing from 0.3% over the next decade to 0.1% thereafter before reaching zero and then shrinking. Declining fertility is projected to push deaths above births starting in 2030, increasingly offsetting net immigration.
New Population Estimates Show Historic Decline in Net International Migration— The U.S. Census Bureau estimates net international migration peaked at 2.7m in 2024 and fell to 1.3m in 2025, with a projected decline to roughly 321,000 in 2026 if current trends continue. The Bureau notes that continued trends would produce the first net negative migration in more than 50 years.
AI Summary.The author estimates a 14.1% wage gap between H-1B visa workers and comparable U.S.-born workers after controlling for age, gender, education, geography, and occupation. Competing research finds a smaller gap, but the author argues it wrongly compares lottery winners' wages to native wages from before the visa recipients could begin earning.
George BorjasCity Journal
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Responding to He and Ozimek’s claim that his paper overstates the wage gap, Borjas argues “H-1B workers should be compared to native workers in the year when they will be earning the bulk of the salary, not in the year when they were awarded the visa.”
How large is the wage gap between H-1B and native workers?
Core argument: The author estimates a 14.1% H-1B wage gap using H-1B wage data from the FY2021–FY2024 lotteries and the 2023 American Community Survey, controlling for age, gender, education, geography, and occupation, with figures inflation-adjusted.
The table summarizes the results of both my analysis and that of He-Ozimek. The first row reports a 14.1% wage gap estimated using H-1B wage data from the FY2021-FY2024 lotteries and the 2023 American Community Surveys (ACS), as I did in my original paper, [controlling for] age, gender, education, geography, and occupation. These numbers are inflation-adjusted, as the NBER paper notes. Row 2 presents the results implied by the He-Ozimek research design, which suggest a smaller wage gap, depending on the exact specification. There is, however, a fundamental error in that design. He-Ozimek calculate the H-1B wage gap by comparing the wage of the FY2024 lottery winners with the wage of natives in the 2023 ACS. H-1B workers should be compared to native workers in the year when they will be earning the bulk of the salary, not in the year when they were awarded the visa. The FY2024 H-1B lottery was conducted in March 2023. The actual employment of H-1B recipients begins after their H-1B status is approved and after the federal fiscal year begins on October 1, 2023; the earliest that FY2024 recipients could actually start earning was in the last quarter of 2023.
Takeaways by Macro Roundup® AI
The author estimates a 14.1% H-1B wage gap using H-1B wage data from the FY2021–FY2024 lotteries and the 2023 American Community Survey, controlling for age, gender, education, geography, and occupation, with figures inflation-adjusted.
The He-Ozimek research design implies a smaller H-1B wage gap depending on specification, but the author identifies a fundamental error in comparing FY2024 lottery winners' wages with native wages in the 2023 ACS.
The FY2024 H-1B lottery was conducted in March 2023, and recipients could not begin earning until the last quarter of 2023 at the earliest, after H-1B approval and the October 1, 2023 start of the federal fiscal year.
Related Articles:
The H-1B Wage Gap, Visa Fees, and Employer Demand— An analysis merging Labor Department, Homeland Security, and American Community Survey data estimates the average H-1B visa worker earns about 16% less than a comparable US-born worker, implying payroll savings near $100,000 over a six-year visa term. Simulations suggest a $150,000–$200,000 visa fee would barely reduce hiring while raising $10bn–$20bn annually.
The Flawed Paper Behind Trump’s $100,000 H-1B Fee— Correcting for a mismatch in survey years and for comparing workers' place of work to natives' place of residence cuts the estimated H-1B wage gap to roughly one-third of the original claim. The remaining average masks that H-1B workers aged 21–22 earn about a 20% premium over comparable native-born workers, while a shortfall appears only after age 34.
AI Summary.Periods of high immigration to America have tended to be followed by restrictions, including the 1882 ban on Chinese laborers and 1924 quotas that capped European arrivals and barred Asian immigration. Those quotas suppressed immigration for 40 years, and the foreign-born share of the population fell to about 5% by 1970.
Economist StaffEconomist
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At 15.8%, the foreign-born population of the US is above its ~15% previous peak in 1890. That prior peak gave way under immigration restrictions such as the Chinese Exclusion Act (1882) and the Immigration Act of 1924.
Do periods of high immigration tend to be followed by restrictions?
Core argument: America's foreign-born population share reached nearly 15% in 1890, a threshold not surpassed again until the mid-2020s, before falling to around 5% by 1970.
After periods of high immigration, restrictions have tended to follow. In 1890 the foreign-born share of America’s population reached nearly 15% (a threshold that would not be surpassed until the mid 2020s). The Chinese Exclusion Act of 1882 banned Chinese labourers from immigrating to America for ten years, the first federal law to restrict immigration explicitly based on race or nationality. In 1924 Congress capped annual arrivals from Europe to just 2% of each nationality’s population residing in America at the time of the 1890 census, and banned immigration from Asia outright. These quotas suppressed immigration for 40 years and prevented America from accepting thousands of Jewish refugees fleeing Nazi Europe. By 1970 America’s foreign-born population had fallen to around 5%.
Takeaways by Macro Roundup® AI
America's foreign-born population share reached nearly 15% in 1890, a threshold not surpassed again until the mid-2020s, before falling to around 5% by 1970.
Congress in 1924 capped annual European arrivals at 2% of each nationality's population residing in America at the 1890 census and banned Asian immigration outright, suppressing immigration for 40 years and preventing America from accepting thousands of Jewish refugees fleeing Nazi Europe.
The Chinese Exclusion Act of 1882 barred Chinese labourers from immigrating to America for ten years, the first federal law to restrict immigration explicitly on the basis of race or nationality.
Related Articles:
The Demographic Outlook: 2026 to 2056— The Congressional Budget Office projects the US population rises from 349m to 364m between 2026 and 2056, with annual growth slowing from 0.3% over the next decade to 0.1% thereafter before reaching zero and then shrinking. Declining fertility is projected to push deaths above births starting in 2030, increasingly offsetting net immigration.
U.S. Unauthorized Immigrant Population Reached a Record 14 Million in 2023— Pew Research Center estimates the U.S. unauthorized immigrant population reached an all-time high of 14m in 2023, or 4.1% of the total population, after a record two-year increase of 3.5m. The overall immigrant population peaked above 53m before declining by more than 1m in the first half of 2025.
Switzerland To Vote On Plan To Cap Population At 10mn— Switzerland will vote on a proposal to cap its population at 10mn, a limit that could jeopardize agreements with the European Union and restrict companies' access to skilled foreign workers. The population stands at 9.1mn, foreign residents make up 27% of the total, and the population has grown about 25% since 2000.
AI Summary.Correcting for a mismatch in survey years and for comparing workers' place of work to natives' place of residence cuts the estimated H-1B wage gap to roughly one-third of the original claim. The remaining average masks that H-1B workers aged 21–22 earn about a 20% premium over comparable native-born workers, while a shortfall appears only after age 34.
Jiaxin He and Adam OzimekEconomic Innovation Group
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He/Ozimek dispute Borjas’ finding that H1-B workers are underpaid. A “temporal mismatch” between the native sample and the H-1B sample means “effectively comparing 2020 wages with 2023 prices.” The ⅔ of H-1B winners aged <34 actually earn a wage premium.
Are H-1B workers underpaid relative to comparable native-born workers?
Core argument: Correcting for errors leaves an average H-1B wage gap only one-third as large as the Borjas analysis claimed, with a consistent geographic definition for both groups reducing the gap to 5.3%.
[Whether] H-1Bs are underpaid depends on which workers we examine. [Older] H-1B workers earn less than otherwise similar native-born workers, while [younger] H-1B workers earn more. [Overall, there is a] small average wage gap, [but it is] only one-third as large as the [Borjas] analysis claimed. [The above table] provides a step-by-step breakdown of how these errors manufactured the appearance of a large wage gap. The [most significant mistake] is a temporal mismatch between his H-1B and native-born samples: the H-1B applications span 2020–2023, while the ACS data [covers] just 2023. [Given] 15.1 percent inflation and [an] 18.7% wage increase for software occupations [from 2020 to 2023], comparing [wages of] H-1B workers [2020 to 2023 to] native-born [wages from 2023] overstates the wage gap, effectively comparing 2020 wages with 2023 prices. [Second], Borjas compares H-1B workers’ place of work to natives’ place of residence. [Using] a consistent definition of geography for both groups further reduces the gap to 5.3%. [Even after corrections], the aggregate average hides that younger H-1B workers are paid [more than Americans], while older H-1B workers are paid [less]. [H-1B workers ages 21–22] earn a 20% wage premium [over natives]. [After age 34], a negative wage gap emerges. Two-thirds of H-1B lottery winners are 33 or younger…the very group that earns a significant wage premium over natives.
Takeaways by Macro Roundup® AI
Correcting for errors leaves an average H-1B wage gap only one-third as large as the Borjas analysis claimed, with a consistent geographic definition for both groups reducing the gap to 5.3%.
The most significant error identified is a temporal mismatch: Borjas compared H-1B applications spanning 2020–2023 with 2023 ACS data, despite 15.1% inflation and an 18.7% wage increase in software occupations from 2020 to 2023.
H-1B workers ages 21–22 earn a 20% wage premium over natives and a negative wage gap emerges after age 34, while two-thirds of H-1B lottery winners are 33 or younger.
Related Articles:
The H-1B Wage Gap, Visa Fees, and Employer Demand— An analysis merging Labor Department, Homeland Security, and American Community Survey data estimates the average H-1B visa worker earns about 16% less than a comparable US-born worker, implying payroll savings near $100,000 over a six-year visa term. Simulations suggest a $150,000–$200,000 visa fee would barely reduce hiring while raising $10bn–$20bn annually.
The Extreme Shortage of High IQ Workers— Semiconductor manufacturing requires workers of above-average intelligence, with the most demanding roles needing IQs in the top 1 in 1,000 — a pool of about 164,000 people in the US, of whom perhaps 100,000 can be placed in such professions. The author argues this scarcity explains reliance on high-IQ workers abroad and on smarter tools and non-human intelligence.
Third-Country Effects of U.S. Immigration Policy— U.S. H-1B visa denial rates rose from about 6% to 16%, and the authors estimate a 10 percentage point rise in denials increases Canadian applications by 30%, roughly one Canadian application per four forgone visas. More exposed Canadian firms increased sales and hired about 0.5 native workers per immigrant.
