October 16, 2005 to October 23, 2005
Skilled Immigration
Many More Skilled Immigrants-BECKER
Scientists, engineers, and other highly skilled workers often must wait years before receiving a green card that allows them to stay permanently in the US. Only 140,000 green cards are specifically allocated annually to mainly skilled workers. An alternate route for highly skilled professionals, especially IT workers, has been to seek temporary H-1B visas that allow them to come for specific jobs for three years, with the possibility of one renewal. But Congress foolishly cut the annual quota under that program in 2003 from almost 200,000 workers to well under 100,000. The small quota of just 65,000 persons for the current fiscal year that began October 1 is already exhausted!
The right approach is to go in the exact opposite direction: to greatly increase the number of entry permits to highly skilled professionals, and eliminate the H-1B program, so that all such visas became permanent. Skilled immigrant workers like engineers and scientists are in fields that are not attracting many Americans. They also work in IT industries, such as computers and biotech, which have become the backbone of the well-performing American economy. Over one-quarter of the entrepreneurs and higher--evel employees in Silicon Valley were born overseas. These immigrants create jobs and opportunities for native-born Americans of all types and levels of skills.
Since they earn more than average, highly skilled professional immigrants contribute disproportionately to tax revenue. They are also considerably younger than average, so they are net contributors to social security revenue. In addition, they and their children have low crime rates and make few demands on the public purse. They have low levels of unemployment, seldom go on welfare, generally have above average health, have relatively small families, and their children do well at school and cause few disciplinary problems.
To me it seems like a win-win situation for the US to admit annually a million or more skilled professionals with permanent green cards that allow them eventually to become American citizens. Permanent rather than temporary admissions of the H-1B type have many advantages to the US as well as to the foreign professionals. With permanent admission, these professionals would make a much greater commitment to becoming part of American culture rather than forming separate enclaves in the expectation they are here only temporarily. They would also be more concerned with advancing in the American economy rather than with the skills and knowledge they could bring back to India, China, or wherever else they came from. In particular, they would become less concerned with absconding with the intellectual property of American companies, property that could help them advance in their countries of origin, perhaps through starting their own companies.
Basically, I am proposing that the H-1B program and the explicit admission of foreign workers be folded into a much larger employment-based green card program for foreign workers. With the emphasis on skilled workers, the annual quota should be multiplied many times from present limits. Unlike the present admission program, there should be no upper bound on the numbers from any single country. Such upper bounds, either in absolute numbers or as percentages, place large countries like India and China with many highly qualified professionals at a considerable and unfair disadvantage.
To be sure, the annual admission of a million or more highly skilled workers, such as engineers and scientists, would lower the earnings of American workers they compete against. The effect on earnings from this greater competition would discourage some Americans from becoming engineers or other professionals. The opposition from competing American workers is probably the main reason for the sharp restrictions on the number admitted. But doesn't the US benefit if, for example, India spends a lot on its highly esteemed Institutes of Technology to train many scientists and engineers who leave to work in America?
Many of the sending countries protest against this emigration by calling it a "brain drain". Yet migration of workers, like free trade in goods, is not a zero sum game, but one with a positive sum that usually, although not always, benefits both the sending country and the receiving country. In the case of migration of highly skilled workers to the US, I believe that it is a winning situation both for the US and for the nations that trained them because these emigrants send back remittances, and some of them return to start businesses based on the experiences they gained in the US.
If America does not accept greatly increased numbers of highly skilled professionals, they might go elsewhere-Canada and Australia, to take two examples, are actively recruiting IT professionals. Or they will remain at home and compete against the US through the outsourcing of highly skilled engineering, research, and other such activities. The growth of outsourcing has created an entirely new case for more generous admissions of skilled immigrants. Since earnings are much higher in the US, many of these workers would still prefer to come here or to other rich countries, but if they cannot, they can now compete more effectively than in the past through outsourcing and similar forms of international trade in services. The US would be much better off by having such skilled workers become residents and citizens, and in this way contribute to American productivity, culture, tax revenues, and education than by having them compete from their origin nations.
I do, however, advocate being careful about admitting students and skilled workers from countries that have produced many terrorists, such as Saudi Arabia and Pakistan. My attitude may be dismissed as religious "profiling", but intelligent and fact-based profiling is essential in the war against terror.
Other countries too should liberalize their policies toward immigration of skilled workers. I particularly think of Japan and Germany that have rapidly aging and soon to be declining populations that are not sympathetic (especially Japan) to absorbing many immigrants. But America still has a major advantage in attracting skilled workers since this is the preferred destination of the vast majority of them. Why not take advantage of the preference to come here rather than forcing highly desirable immigrants to look elsewhere?
My first preference is to admit many immigrants through a sale of the right to immigrate (see the discussion in our blog entry of February 21, 2005). Since skilled immigrants would tend to bid the most, that policy too would favor skilled immigrants. But in this discussion I have set aside my preference for a market in entry rights in order to concentrate on the importance of getting more highly skilled immigrants, with or without charging for admission.
Skilled Immigrants--Posner Comment
I agree wholeheartedly with Becker about the desirability of our accepting more skilled immigrants for permanent residence. Of course, the more that are accepted, the lower the average quality. The qualities of skilled immigrants that Becker rightly praises are a function of the size of the skilled-immigrant quotas; the lower the quotas, the more outstanding the successful applicant is likely to be. But it is a safe bet that the quotas would have to be much higher before a discernible fall in average quality was detectable.
The most difficult issue relates to the security concerns that Becker touches on, which I discuss at the end of this comment.
I think there is a simple answer to the "brain drain" problem. For concreteness, consider immigration to the United States of Indian software engineers. The more who immigrate, reducing the supply of Indian software engineers to Indian software producers, the higher the wages of those engineers in India. This will tend both to reduce the numbers immigrating to the United States and to elicit a greater supply of engineers for the Indian market.
I am puzzled by the political opposition to increasing the quotas for highly skilled immigrants. The average worker is benefited by immigrants who have skills much greater than his own, because they increase U.S. productivity (so the average worker benefits as a consumer and he may even benefit as a worker if his employer's greater productivity increases the employer's demand for workers) and he does not compete with them; they are in different job categories. And as Becker points out, restricting immigration of highly skilled workers increases the incentive of U.S. firms to outsource production to countries containing such workers; and outsourcing, by exporting jobs, harms the employees of those firms. So I would not expect unions, or average Americans, to oppose the immigration of the highly skilled. Maybe firms that compete with employers that utilize skilled immigrant workers most efficiently oppose such immigration; maybe universities as well, because, as Becker mentions, the more skilled immigrants there are, the weaker the demand of nonimmigrant Americans for scientific and technical education. Hiring skilled immigrants is a way of outsourcing such education.
One way to reduce opposition to such immigration would be to insist on a somewhat higher skill level of applicants for skilled-worker visas. The higher the required level, the fewer nonimmigrant Americans will be affected by the immigration of skilled workers. There are three principal employment-based immigration categories for greencard applicants (as opposed to the H1B program for temporary employment). The top two, EB1 and 2, set very high standards, but the third, EB3, is very loose: it "is for aliens with bachelor's degrees, but who do not qualify for the EB2 category, skilled workers with at least two years of training or experience, and unskilled workers. An alien in the bachelor's degrees category must demonstrate that he or she has a bachelor's degree or equivalent, that a bachelor's degree is required for the position, and that he or she is a member of the profession." Oddly the same annual quota--40,000 visas--is fixed for each of the three categories. If the first two quotas were increased, and the criteria for the third tightened up, perhaps by specifying particular industries, such as high-tech, in which the applicant could work, the impact on nonimmigrant American workers would be reduced.
I would not describe as "profiling" a system of screening would-be immigrants that, without fixing quotas on a national basis, screens more carefully applicants from nations that are breeding grounds of terrorists. The efficacy of such screening is another matter; the less effective it is, the stronger is the argument for reducing skilled-worker immigration from countries in which terrorists are admired and recruited. Besides terrorists, we have to worry about spies from potentially hostile nations; this implies a need for careful screening of Chinese immigrants as well.
Skilled Immigrants--Posner's Response to Comments
As usual, a number of excellent comments.
Several express concern that an Indian "brain drain" will hurt India by depleting its supply of high-IQ individuals. This is unlikely. As I said in my post, the "drain" is self-correcting because a reduction in the supply of (say) software engineers in India will result in higher wages for those workers there, which will not only slow the drain but also increase the supply by improving the job prospects. Since India has a population in excess of 1 billion, the number of high-IQ individuals is undoubtedly so great that a limited brain drain will not significantly weaken the nation's long-term prospects.
Several comments discuss my puzzlement concerning the political opposition to larger quotas for skilled immigrants. I can understand why the skilled American workers with whom those immigrants would be competing might favor keeping the quotas low, but my impression is that for the most part they do not, perhaps because in knowledge industries like software skilled workers add more value than they capture in their wages, creating a virtuous cycle that benefits the entire workforce in the industry. (This would be consistent with opposition to expanding quotas for women and minorities--such quotas favor the less skilled and so do not produce value that benefits competing workers.) The main opposition to relaxing the quotas seems to come from unions; maybe they fear that any relaxation would spread to less skilled workers. The universities, moreover, have an additional stake in limiting the quotas besides the one I mentioned in my post; as one commenter points out, foreign students, forbidden by their student visas to work at regular jobs, provide valuable research assistance to university faculty.
A comment about the cultural benefits conferred by immigrants suggests a partial answer to the security concerns that I expressed in my post. Our intelligence system is in desperate need of more people fluent in Asian (including Middle Eastern) languages and intimately familiar with the cultures of those regions, and the need cannot be met by training Americans.
Several comments emphasize quite properly the defective structure and administration of the quotas. One comment points out that as the temporary skilled-worker visas (H1B) expire, the holders often join the queue for permanent-residence visas, and so the queue lengthens--it is now several years for India and China. (The quotas are on a country basis--another mistake.) Visas are granted in the order in which they are applied for, and thus to the people who have been in the queue the longest. They tend to be the less qualified workers; the more qualified will have had better opportunities in their home country and the longer the queue, the more incentive they will have to exploit those opportunities rather than wait in immigration limbo. In addition, we lose some of the best immigration prospects by delay in the processing of visa applications, which is due to a shortage of visa personnel against a background of increased scrutiny of those applications for security reasons. The relatively low costs of expanding the number of such personnel would probably generate more than offsetting benefits in a higher quality and quantity of highly skilled immigrants.
Response on Immigration of Skilled Workers-BECKER
Let me try to respond to some of the good comments, and clarify my position on others.
I tried to be clear that I would prefer the H-1B program be folded into a program that allows many more skilled immigrants to enter permanently. I do not believe workers under H-1B program are "exploited"-they do quite well economically- but they would have more commitment to this country if they were allowed in permanently.
Whatever are all the forces that determine earnings, immigration of many skilled workers will lower the wages of native-born skilled workers. There is no way around this fundamental proposition. Whether such immigration lowers these wages by a lot, however, does depend on the degree of substitutability of different classes of workers, how many fewer Americans train for these skilled jobs, and other factors. The other side of the story is that a larger number of skilled immigrants tend to raise, not lower, the wages of unskilled American workers.
It should have been clearer that I am not advocating eliminating unskilled immigrants, or even reducing the number of legal unskilled immigrants. I believe that many of them make important contributions to this country either directly or through their children and grandchildren. Perhaps even their numbers should increase-I am very pro-immigration. But I do believe that if for various reasons we are limited to taking a certain number of immigrants, then strong preference should be given to skilled immigrants for the reasons I cited, and for reasons given in several comments.
The story is told that the Premier of China was approached by one of his staff during the mid 1980's who asked whether China should allow so many young persons to study abroad since they would not come back. His answer supposedly was China does not deserve to get them back if the environment cannot be made attractive enough for them to return. This is my view on the effects of so-called brain drains. Skilled workers do not return to Africa because economic and other conditions there are so dismal. As soon as China began to free its economy, and a little bit other freedoms, a much larger fraction of their students abroad decided to return. That is also the experience of South Korea, Taiwan, and many other countries.
But even without a large number of returnees, countries benefit on the whole from sending their students and skilled workers abroad. It is not only the remittances, but also the knowledge gained by those remaining from interactions with relatives and friends working and studying in more advanced countries. Moreover, greater pressure develops in a country to reform in order to attract more of their students and others back from abroad. All these reasons might explain why studies show that countries that send more students abroad experience more rapid rates of economic growth.
Some worried about immigrants bringing in diseases in this interconnected world with possible pandemics. I agree they have to be cleared medically, but that is no more a problem for immigrants than persons who enter the US on tourist visas, or Americans who return abroad after visiting countries where the disease burden is high. And certainly we can control the health of skilled immigrants better than the health of the mainly unskilled workers who enter the country illegally.