An executive order worth $100 billion: The impact of an immigration ban’s announcement on Fortune 500 firms evaluation

How do restrictions on the movement of skilled workers affect American companies? An executive order worth $100 billion, published by the Global Economy and Development program at The Brookings Institution, examines the impact on Fortune 500 firms of an executive order issued by President Trump on June 22, 2020, which banned the issuance of new H-1B and L-1 high-skilled work visas. The authors show that restrictions on these non-immigrant visas issued to highly skilled immigrant workers, most of whom possess college, if not advanced graduate degrees, negatively impacted the financial position of large American companies. By examining the cumulative average abnormal stock returns (CAARs) for Fortune 500 companies, the authors found that the abrupt constraint on the ability of these companies to access skilled labor from abroad eroded their market valuation by around $100 billion. While companies can hypothetically respond in the long run through adjustments like offshoring, the authors show that the executive order significantly damaged firms in the short run by eroding their market valuation by 0.45%. By analyzing the immediate aftermath of this new policy, the study contributes to current debates surrounding immigration restrictions on skilled temporary workers by demonstrating the value that visas issued to skilled employees bring to U.S. firms. (Sonali Ravi for The Immigrant Learning Center’s Public Education Institute)

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