Noteworthy analysis although may be correlation as much as causation:

On June 22, 2020, President Trump issued an executive order(EO) significantly reducing the number of people eligible for non-immigrant work visas, arguing that due to high domestic unemployment during the pandemic, “the entry…of certain aliens as immigrants and nonimmigrants would be detrimental to the interests of the United States.” This new restriction barred nearly 200,000 highly-skilled international workers — many of whomhold advanced degrees in STEM fields, and on whom U.S. companies rely to fill key talent gaps — from entering the U.S.

As researchers who study immigration and geographic mobility, were interested in examining the immediate impact of this EO on business. To that end, we conducted a study in which we tracked changes in stock price for all publicly traded Fortune 500 companies in the U.S. (a total of 471 firms) in the aftermath of the EO. We found that immediately after the new policy was announced, these companies’ market valuations dropped by about 0.45% — representing a total loss of around $100 billion. Moreover, these companies’ stock prices remained below their pre-EO levels for at least 10 days after the announcement, suggesting that the losses we’d identified represented a significant impact, not a temporary blip.

In addition, our research also found that this negative impact was much more pronounced for the 295 firms that had maintained or increased their reliance on foreign workers during the years prior to the EO (as measured by growth in each firm’s Labor Condition Application requests, a proxy for companies’ reliance on H-1B visa employees). Specifically, these companies experienced a drop in market valuation of 0.5-0.6%, while the companies whose reliance on foreign workers had decreased in recent years experienced a valuation drop of only 0.3% — meaning firms that relied more on foreign employees took almost twice as great a hit in the wake of the announcement. This suggests that the reductions in valuation we measured were in fact caused by the EO, rather than by other, unrelated economic disruptions (since other disruptions, such as the impact of the pandemic or political uncertainty, would presumably have affected all firms equally regardless of their reliance on foreign workers).

Our study was limited to the immediate aftermath of the EO, but our finding fits into a larger body of research suggesting that immigration restrictions can harm the U.S. economy in myriad ways. For example, one study reported that when firms hire fewer highly skilled immigrant workers, it actually leads them to hire fewer skilled workers overall, including both international and domestic employees. In addition, a comprehensive report from the National Academies of Sciences, Engineering, and Medicine found in 2016 that “there is little evidence that immigration significantly affects the overall employment levels of native-born workers.” The report went on to describe the value of immigrant labor in no uncertain terms, stating:

“The infusion by high-skilled immigration of human capital … has boosted the nation’s capacity for innovation and technological change. The contribution of immigrants to human and physical capital formation, entrepreneurship, and innovation are essential to long-run sustained economic growth. Innovation carried out by immigrants also has the potential to increase the productivity of natives, very likely raising economic growth per capita. In short, the prospects for long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants.”

The list of research-backed downsides to restricting immigration goes on and on. Studies have shown that policies restricting U.S. firms’ ability to hire global talent for highly skilled positions can have a long-term, negative impact on those companies’ profits, productivity, innovation, and growth. There is also robust evidence suggesting that when multinational firms are unable to hire immigrant talent for their U.S. offices, they often resort to offshoring their activities to other nations, ultimately reducing their domestic hiring rates. Another study, conducted by one of us (Prithwiraj Choudhury) and Do Yoon Kim, documented the role of skilled immigrant workers in transferring novel ideas from their home countries to the U.S. The study found that teams with both immigrant and domestic employees benefited from combining their diverse ideas, exhibiting greater levels of innovation than teams without immigrant members.

Yet another study, conducted by two of us (Prithwiraj Choudhury and Dany Bahar) as well as Hillel Rapoport, examined the impact of immigration on a country’s technological innovation, finding that countries with more immigrants who filed patents in a given specialization were significantly more likely to become globally competitive in that specialization. This suggests that the Trump administration’s restriction on the immigration of highly skilled workers could have a lasting negative impact on America’s global competitiveness, significantly reducing productivity and innovation and impeding the country’s post-pandemic economic recovery.

Especially in the midst of an economic crisis, the research clearly suggests that policymakers looking to support the American people should focus on easing — not increasing — human capital restrictions on businesses. Our study has shown that limiting firms’ ability to hire top global talent has an immediate negative impact on their valuations, adding yet another data point to the growing body of evidence demonstrating that restricting immigration to the U.S. harms the country’s economy and its citizens. We hope that these findings can inform the ongoing policy debate, and that they can inspire the incoming Biden administration to take a more productive approach to immigration policy in the months and years to come.