Proposed reform of the H-1B programme under Trump administration and the adverse selection in Green Card applications

The dialogue of major reform in immigration laws along with increase in rejection of H-1B petitioners since the start of the Trump administration may make employers find H-1B renewal becoming more difficult and costly for low-end positions and less-educated employees. Using the Program Electronic Review Management (PERM) application data, this article examines the impact of the recent threat of immigration reform on the share of entry-level positions and petitioners with no college degree in Green Card applications. We found evidence that entry-level positions and applicants without a college degree became more heavily represented among new PERM applications after 2016, even when a trend and occupations were accounted for. The findings are consistent with the hypothesis that employers face stronger incentive to retain workers and sponsor their PERM applications since H-1B renewal will likely become more difficult and costly for low-end positions and less-educated workers.