Promoting entry of high–quality workers through U.S. immigration policy
Achieving future economic growth and dealing with the fiscal problems of the U.S. retirement and welfare systems requires productive, high – earning workers. However, current immigrant policy emphasizes family reunification. We show that this results in immigrants with substantially lower education levels and lower earnings than natives and increases the inequality of earnings and of household incomes.
Using data from recent Current Population Survey March supplements, the paper examines the effects of requiring immigrants to meet two out of three conditions: [1] a high school or college degree, [2] being less than 40 years old, and [3] working in a professional occupation, while admitting the same numbers of immigrants.
This policy has major effects on the origin countries of U.S. immigrants, with some countries (El Salvador, Honduras) sending many fewer immigrants, and some countries (India, China, the Philippines) sending substantially more. There are substantial positive effects on immigrant earnings. Also, current immigrants make substantially greater use of government transfer programs than all natives. But applying this point system makes the immigrants admitted participate substantially less in government transfer programs than native non – Hispanic whites (a group with lower transfer usage than all natives). We also show the effects on earnings and household income inequality of applying this point system.
Finally, we examine immigrant earnings assimilation. While overall recent immigrant earnings tend to grow slightly faster than native earnings, that earnings growth is not enough to overtake natives given the entering earnings disadvantage of all immigrants. With this point system, the immigrants admitted start at a higher level and surpass natives relatively quickly.