Fact of the Week: Winning the H-1B Lottery Increases a Start-up’s Odds of Going Public in Five Years by Up To 53 Percent

Source: Stephen G. Dimmock, Jiekun Huang, and Scott J. Weisbenner, “Give Me Your Tired, Your Poor, Your High-Skilled Labor: H-1B Lottery Outcomes and Entrepreneurial Success,” NBER Working Paper No. 26392, October 2019.

Commentary: Demand for H-1B visas, which allow U.S. firms to recruit high-skilled foreign workers, has dramatically exceeded the supply—there were 200,000 applications in 2019 for the 85,000 visas that were available. A new study estimates the importance of these visas by examining 1,900 start-ups that applied for an H-1B visa between 2008 and 2015, the large majority of which submitted a single application. It finds that the start-ups that won the lottery and were granted visas were 3.5 percentage points more likely to have a successful IPO within five years than those that did not, a 53 percent increase from the baseline average of 6.6 percent.