Should immigration be family-based?

How should we select legal immigrants?  Under the status quo, about two-thirds of new legal arrivals come through family connections; the new immigration bill would (over time) move toward a points system and favor skills.  This stimulating article suggests that the change would favor the suburbs and penalize New York City.  The city’s economic revival depended (and still depends) on immigrant-run, family-connected small businesses.  I liked this sentence:

These days, in a Lower East Side neighborhood that has been a cradle of
family chain migration to America for 200 years, the deli at Delancey
and Allen Streets is a 24-hour operation run by a man from Bangladesh –
one of about 70 relatives to follow a Bangladeshi seaman who jumped
ship here in 1941.

The focus on skills has many advantages, but might it destroy New York City?  In contrast, Northern Virginia, with its high-tech firms, would benefit from the reforms.  Los Angeles, which has a higher percentage of illegals, and a higher concentration of Mexicans, stands in a very different position than does New York.

A skills-based system would probably bring more men and fewer women; in many poorer countries women do not have good educational opportunities.  If the men are allowed to bring over spouses from the home country, this could mean less assimilation; female arrivals are more likely to marry out of group.

Henry Farrell pointed out that a skills-based system might drive greater "brain drain" in poor countries; in his view America’s gain would be the world’s loss.  Alternatively, by sending their skilled citizens, poor countries might received improved skilled returners, more remittances, and more business connections.  Arguably this has worked for India.  The new entry requirements also might increase the incentive for third world residents to
acquire skills, and of course not all of the skill-seekers will end up
migrating.  Overall I do not believe the net effect here is known.

If family members are left out of legal immigration, might they have the greatest demand to then come as illegals?

The bottom line: A very big change is in the works here, yet I don’t feel I have a good handle on it.

Here is George Borjas on point systems.  Comments are open, but please don’t rehash the usual debates, try to make new points and please focus on legal arrivals only.

Comments

"destroy New York City"?

You mean like physically, like Godzilla?

What does that phrase mean?

Yeah, high skilled engineers are going to run around with hammers, smashy smashy.

If by destroy, you mean "use their smart brains to earn high incomes and spend lots of money on goods and services", then yes, they'll "destroy" New York.

Canada, like many other countries, uses a skill-based system. Take a six-part test that gives you points for language skills, education, experience in skilled jobs, add in a few more points for having a skilled spouse, having relative in the country, and having an extant job offer. It's relatively easy to see if you make it.

OTOH, as a highly educated and highly skilled Canadian, I was very surprised how hard it is for me to get a US visa. Unless I'm a world-class violinist or basketballer, a firm has to prove that they can't find a qualified American before they can sponsor me for an employment-based green card. However, if I had one US great-grandparent, I'm in, no questions asked. Odd, IMO.

the driver for illegal immigration is a demand for low-skilled labor.

this is nonsense. by definition, demand for highly-skilled labor is higher.

the main reason New York is not growing faster is that there is an incredible shortage of qualified accountants, IT folks, finance/operations folks, lawyers, etc. This shortage drives investment elsewhere.

the limiting factor to New York growing further is local urban rent, not a "shortage" of workers per se. otherwise highly-skilled workers would be incented to immigrate.

Isn't the question, then, JWR, what is a "family"?

Does it stop at husband, wife and kids?

Does it stop at siblings and parents?

Does it stop at aunts and uncles and cousins?

Does it stop at...you get the idea.

JWR: it's not a question of whether people should have family connections or not. it's a question of whether they should be bound to india and live detached from their geographic and political community, or whether they should develop family connections with Americans that also serve to integrate them with loyalties to broader society.

As for Farrell's point, isn't it a net benefit to even the poorest to have their top-skilled labor move to where the greatest capital is for them to complement and use. That is to say, didn't India benefit from the fact that Amartya Sen moved on from Calcutta to Cambridge? Isn't the same true for private entrepreneurs (who often continue to serve their original values, but with greater capital), too?

How about we allow the markets to decide? Screw the point system, auction off the visas, and allow a secondary market in them.

Some very small technical details would have to be established:

1) Only the owner of the visa can exercise right conveyed by it (to prevent virtual enslavement of immigrants by visa owners).
2) The visa can only be transfered when if it's current owner is either outside the country or has other legal right of residency in the US.

This would cause efficient allocation of visas. If suddenly there were a shortage of a new unexpected type of skill it would require no bureaucratic insight to favor it, the markets would automatically.

I would like to point out that under my proposed market system any charitable organization could unilaterally decide to purchase a visa for someone they think should be a refugee. It also invovles minimal political nonsense.

One obvious distinction that is lost is that the proposed changes would retain "nuclear family reunification" (spouses and minor children) while cutting back on "extended family reunification" (siblings, parents, and adult childre). Although Hillary and Barack have been rattling on about how America is built on family values, the reality is that American culture emphasizes nuclear families (e.g., Ozzie and Harriet), and is quite suspicious of extended families (e.g., the Corleones).

Extended family reunification has been bad for low-skilled Americans, especially African-Americans, who have very little chance to get hired by by nepotistic immigrant entrepreneurs, who would rather import their low-skilled relatives. As you travel about the country, notice how few American blacks work in immigrant-owned businesses versus how many African-Americans work in big national chains (e..g, Hertz, Marriot, Ruby Tuesday, etc.)

A more market based system for managing immigration is a good idea.

No immigration proposal I've heard of is market based, there is no price system involved. It's basically whether you choose to cherry pick highly educated talent or accept lower skilled labor in the hopes that future generations will take advantage of the opportunities afforded them. I don't see much point in wishing for an option that's not politically viable.

Currently in the US we have a strange and erratically enforced rationing system

True and I suspect this is an aspect of the issue our hosts would prefer we stayed away from in comments. At any rate, this aspect has more to do with peculiarities of US history than anything else.

That is to say, didn't India benefit from the fact that Amartya Sen moved on from Calcutta to Cambridge?

Interesting point and actually leading into what I would like to say which is that in modern society the kind of elites proponents of the skill point system hope to attract may actually have closer ties their home country than current immigrants and in the long run be less of an economic stimulant if you're worried about economic entities bounded by national borders. As a child of skilled immigrants (both parents with graduate degrees) whose parents have gone back to the Old Country, I suspect we'd start hearing stories of immigrant investment bankers and research scientists who banked their American paychecks, built a McMansion back in the old country and take their skills back with them after a decade or two to enjoy the benefits of the generally lower cost of living. It's already happening with some Asian immigrants who put may put in a post-doc or five years in industry after studying at an American institute of higher education then high tailing it back to Singapore, Hong Kong, Taiwan, Hyderabad, Bangalore etc. to work for Infosys, TMSC etc. They do contribute to the US economy but the magnitude of the rate at which they contribute is mitigated by the duration for which they do so.

Like most of the comments here this is mostly anecdotal evidence, but what academic research I've seen seems to say the win for immigration comes from the second and especially third generations who tend to have higher earnings than their parents and often higher earnings than their native age-mates.

To return to the anecdotal evidence, it makes little difference to a Hong Kong billionaire whether their primary residence is in Vancouver, London or Geneva their investments are made worldwide and their personal consumption likewise is spread globally.

1. The National Research council 1995 analysis was clear: low skill immigration fiscally horrible for the US, high skill immigration fiscally good. (Medium skill was also a net positive, although they might underestimate the use of services).

2. If you really believe in markets let’s use them. Auction 1 million visas per year, to the highest bidders. Allow yearly down payments if you like. Let underlying factors decide if family is better or skill. If the Bangladeshi entrepreneur wants his “hard working† brother and his family that’s fine, let him pay for it.

You win twice. More money to the US taxpayers, and self selection.

The libraltarians that are fighting to import a new underclass are of course free to chip in themselves and buy visas for all the high school dropouts you want.

Ps.

Family and skill are NOT necessarily dichotomous. The correlation is obviously high, both between parents and children, sibling and spouses. I would guess most of the German I-bankers could bring their family over through skill visas, eventually.

Why is Cowen assuming there is a tradeoffs? Probably because he acknowledges that the immigrant groups that are mostly geared towards chain immigration and large extended clans (“families†) also tend to be the low skilled ones. (I guess Asians and their old parents is the exception).

What should that tell us about the ability to assimilate?

There's another concept that economists should Google called "opportunity cost." The current system of letting foreigners in on nepotistic grounds costs American-born citizens an enormous amount of money in opportunity costs. If the market price of a green card was, say, $100k, then selling a million green cards a year adds up to $1 trillion per decade in opportunity costs.

The market value might well be higher.

Robert:

Few Latinos would be eligible to move to Australia. They don't have the education to compete with the European and South East Asian immigrants to Lebanon, and obviously don't have any humanitarian excuse other than being middle income in the world.

About 10% of the Mexicans have moved to the US, yet Mexico does not even show up among the top 20 origin countries for Australia!

The 75.000 or so Lebanese to Australia (and to a lesser extent those from Vietnam) demonstrate the cost of emotion driven "know-nothing" pro-immigration. Mainly let in not based on skill, but humanitarian grounds. Lebanese are less than 2% of the immigrant stock, but cause a huge share of the problems, regarding crime, cultural clash, unemployment etc.

I am a skilled migrant from a Third World Country who moved to Australia two years ago. Worked in USA on an L1 visa for three years . Realized that becoming a citizen was practically impossible coz I would need to spend more than a decade chasing the Dept of Labour / Justice / Homeland Security.

Am a permanent resident now (like a GC).Will become a citizen in a couple of months.

I had no family and had to depend on my skills to climb out of a Third World Hell hole. Final choice was between Australia and Canada) - Preferred Australia coz it is warmer.

I pay tax at the top marginal rate > 40%. thanks Peter C for reducing some of it.

America's loss - Australia's gain.

The skill based system is inherently fairer coz an accident of birth does not determine your opportunity to succeed. Family is an important factor in the migration system but the way it is structured in USA now makes it an over riding factor. Quite like the Hindu Caste System. Your birth determines your future. Somehow I find that demeaning but then I am biased.

Would I move to USA even a points system was introduced - No.

I dont see a significant difference between living in Aus / USA.

The 'cost' of getting a citizenship is so much lower for a illegal one as compared to a legal one. I met a few folks who encouraged me to stay on as an illegal coz an amnesty would soon be available. Smart chaps. But with my income expectation, it was not a viable option.

I feel sorry for some of my mates who are still trying to get a Green Card. And this after working in USA for five years.

For all those who are still chasing their tail to get a GC consider Oz / Canada. It is a viable option.

Well i think the reason for driving illegal immigration is a demand for low-skilled labor by developed countries.

This change would favor the suburbs but in no case its going to penalize New York City.

Oh wow... Burgess and Park have a lot to answer for.
A few points:

1st and biggest error in the article: impoverished/working-class/immigrants do not inherently belong to the inner city, aside from the demographic trends of the past two decades that indicate these groups are now preferentially locating to the suburbs, there has historically always been a solid majority of these 'undesirables' living outside of city limits, even in the suburbs. There are 15 decades of census data that is unequivocal on this point.

2nd error: Assimilation? Beside the rather naive assertion that there is an essentially 'American' identity to achieve, this tired trope is in this case simply a cover word for the sort of cultural essentialism that fueled the racist and eugenics driven immigration debates of the 1920s. Even if the Department of Homeland Security can somehow avoid labeling every owner of a Qur'an as unassimilable, the system remains inherently skewed toward continuing the prejudicial system of personal evaluations by the self-same civil servants who awarded visas and green cards last year. All this reform does is make the current system look more objective and quantified.

3rd: Why does everyone assume that more education = more productive workers?

4th: Even more objectionable is the continuing presence of native born workers who fail to meet even the barest qualifications for productive citizenship. We need to review everyone's desirability for this system to work, after all, isn't this a nation born on the principle that all men are created equal? Why should only the native born have access to the lucrative wait staff, landscaping, housekeeping, nursing, farm and construction labor sectors of our economy?

cheers

If you don't want to assimilate to the norms of a country, STAY THE HELL OUT OF IT!

"Assimilation" is actually a code-word for not being a criminal, on welfare, or having illegitimate children. Mexicans actually are "assimilating" in that the later generations have worse social statistics than the Mexican average. They are "assimilating" toward inner-city slum norms rather than middle-class ones.

MLB - Dont follow it. And for an immigrant MLB or NFL or AFL or NRL are immaterial. Depending on the country that one chooses to live in, one follows a particular sport.

Quite interesting to read that although there are plenty of Latinos in Alaska few illegal ones in Canada. If this is true, then it is a live test case of societies. In about 25 years we should be able to find out if the immigration model of the USA is a better one vis a vis the Canadian / Australian / New Zealand.

I do know that the social fabric of Australia has not crumbled despite a substantial increase in population. At the end of World War II, Australia's population was just over 7 million, with around 90 per cent born in Australia. Today, the population is just over 20 million, with slightly more than 75 per cent born in Australia. ( Dept of Immigration statistics). But then, the largest source of new immigrants is the UK.

Many a time (on this post as well) in general debate, a fear that single men are likely to migrate and cause problems is raised. Most single men who could obtain a Skilled Migrant visa are highly desired catches in their native communities. Fear not - they wont be doomed to self pleasure !! Quite a baseless fear.

If you really believe in markets let’s use them. Auction 1 million visas per year, to the highest bidders. Allow yearly down payments if you like. Let underlying factors decide if family is better or skill. If the Bangladeshi entrepreneur wants his “hard working† brother and his family that’s fine, let him pay for it.

home based

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