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01-02-2012

The Value of an Employment-Based Green Card

Authors: Sankar Mukhopadhyay, David Oxborrow

Published in: Demography | Issue 1/2012

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Abstract

The need for and role of highly skilled immigrant workers in the U.S. economy is fiercely debated. Proponents and opponents agree that temporary foreign workers are paid a lower wage than are natives. This lower wage partly originates from the restricted mobility of workers while on a temporary visa. In this article, we estimate the wage gain to employment-based immigrants from acquiring permanent U.S. residency. We use data from the New Immigrant Survey (2003) and implement a difference-in-difference propensity score matching estimator. We find that for employer-sponsored immigrants, the acquisition of a green card leads to an annual wage gain of about $11,860.

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We use the terms “green card,” “legal permanent residency (LPR),” and “permanent residency” interchangeably in this article.

Extensions on pending green card applications can alter the six-year time interval.

In our analysis, we do not distinguish between H-1B and L-1 temporary workers. Although the use of L-1 visa has increased since the late 1990s, the number of L-1 visas issued is still small compared with the number of H-1B visas even though the number of L-1 visas is not capped (Kirkegaard 2005). Given the time frame of our sample, we do not expect the share of L-1 immigrants to be particularly large in our sample. We discuss this issue further in the Data section.

Green cards may have a high nonmonetary value (e.g., utility from having relatives close-by, or peace of mind from persecution), but we do not address those issues here.

Another level of selection relates to the question of who immigrates in the first place. That selection, although important for other purposes, may not be very important here because our universe consists of only immigrants and not the whole population of the source countries.

We also implemented a cross-sectional matching on a larger sample of 863 immigrants. The summary statistics for this group are in the last four columns of Table 2.

Alternatively, we could have matched of the year of birth, which would not require this adjustment. But interpretations of coefficients of higher-order terms (like age squared) are problematic. Using year of birth yields the same results.

We did not use years of education in our baseline specification because that variable did not satisfy the balancing criterion in the cross-sectional matching sample (discussed later in this section). However, years of education does satisfy the balancing criterion in this sample, and including it in the propensity score specification does not change our estimates.

The summary statistics for this sample are presented in the last four columns of Table 2.

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Title: The Value of an Employment-Based Green Card
Authors: Sankar Mukhopadhyay
David Oxborrow
Publication date: 01-02-2012
Publisher: Springer US
Published in: Demography / Issue 1/2012
Print ISSN: 0070-3370
Electronic ISSN: 1533-7790
DOI: https://doi.org/10.1007/s13524-011-0079-3

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