Excellent work, Michael!

No surprise there

Thanks for the review!

Thanks, Michael!

Put simply: tighter talent pipes → more acquisitions → knock-on effects for competition and industry structure.

We'd love to hear from any firms facing this issue, particularly how you've responded to skilled worker shortages. Any feedback on the study is also welcome.

www.nber.org/papers/w34248

But our study shows that's not the case because there aren't enough native workers available to begin with. So firms resort to the expensive and risky option of M&A to make up for the very real shortage.

The CBO projects sizable reductions in the foreign-born workforce under current plans. The lastest jobs report shows over 1 million missing immigrant workers from the US labor market since the start of 2025. Proponents of restrictionist policies argue that they force firms to hire native workers.

This is extremely important in the current immigration environment. Policy signals matter for firm strategy. This year alone there many proposals out there to make it harder for firms to hire skilled workers through the H-1B and other visa programs.

The effect is strongest for deals in which:
▪️ The M&A purpose is closely related to the skills of the foregone workers
▪️ The target is in a location with a high concentration of skilled workers
▪️ The target is small instead of very large
▪️ The target is domestic instead of foreign

We study 3,800+ firms across two decades and find a clear pattern: when high-skill visas (H-1Bs in this study) get harder to secure, firms don’t just wait it out or easily find native workers. Instead, they respond by making more acquisitions to “buy” the skills or output they intended to hire for.