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Liberalising Immigration Policy

Immigrants are the lifeblood of a country, but many countries routinely turn away people who want to make a contribution to their society. This is just another form of economic protectionism that harms the country in the long run.

Written by johnleemk on 10:26:41 am Apr 11, 2007.

Many countries today maintain strict immigration policies. Even the United States, which has a national symbol proclaiming its welcoming of the tired and hungry, puts a rather tight leash on immigration. I heard that not too long ago, the US announced it had received 150,000 applications for the H-1B visa in the span of one day — and only had 65,000 spots to grant, thanks to an immigration quota.

These policies do not make much sense. They are often grounded in simple economic nationalism — our country, our jobs, our people need to be protected and insulated from competition — but economic nationalism is often irrational. National security is of course something that must be guarded, but you do not need blanket policies to guard your country.

Often, overzealous immigration controls result in a policy that can't be enforced, leaving huge porous borders for illegal migrants and unwanted evildoers to cross at will. In such a case, it makes little sense to have such a tight policy when it can't even be enforced — the better answer is to liberalise the policy and try to regulate the flow of migrants so as to ensure orderly entries and exits.

Applications for visas should be treated fairly; there is little point in setting an arbitrary quota for them. Rather, simply set the appropriate standards for visa applications so people will know how they should go about getting into the country.

Someone who wants to apply for a visa to work as, say, a doctor, should know what medical qualifications are accepted, and how best to make her application attractive so it will be appealed. The same goes for labourers like bricklayers — set minimum standards (e.g. must have a primary education) for the entry of unskilled labour so you can be sure that you will be getting people who will contribute to the economy.

Of course, individual applications should be vetted appropriately for security; it is ridiculous to summarily dismiss applications simply because at first glance the applicant "might" be a terrorist.

Of course, it is not necessarily prudent to have a completely open border policy, especially with regard to unskilled labour. But there is no reason that skilled labour should be protected on groundless reasons such as economic nationalism.

If you are smart enough to be a member of the white collar work force, you are smart enough to compete with the best and brightest of the world. Either improve your skills, or face oblivion — liberalisation of immigration policies for white collar workers would mean that skilled workers could no longer take things for granted.

Liberalising immigration policy for unskilled labourers is harder, because they are in much greater supply and are more likely to swamp the country. The country's governance and administrative systems will be unable to handle a huge influx of migrant labour, and making matters worse will be the social upheaval that follows.

If you are thinking about the social costs, the answer is obvious: correct the negative externality! A negative externality occurs when the behaviour of one party to a transaction imposes costs on someone not involved in the transaction. In this case, the migrant and his employer are imposing external costs on the society the migrant enters because he brings a minuscule amount of social upheaval with him.

The answer? Simply enforce a tax on migrant labourers that reflects their costs to society. Then they will either have to stay home or pay the tax, rather than passing on the costs of their migration to the peoples of the country they migrate to.

Moreover, it will be wise to distinguish between those who intend to permanently migrate to the country, and those who just want to work on a temporary basis. Temporary work permits should be a possibility, and the bar for applying for these should not be set too high, lest they drive frustrated migrants into applying for a permanent residency, when they have no actual intention of residing permanently in the country. And, of course, those who do intend to permanently migrate should be welcomed with open arms — as long as the costs imposed by their migration are paid by them, not by the society they enter.

It is irresponsible to have a too restrictive migration policy. A completely open border is folly, but so is closing the door (or only leaving a slight crack ajar) to potential immigrants. Turning away people who want to contribute positively to your society, and often can (why on earth should, say, a Ph.D. candidate have his student visa application rejected?) is simply stupid. And protecting your employees from competition only hurts them in the long run. Expose them to competition — if they can't handle the heat, then retrain them and help them find a new niche. But don't let them remain insulated from incentives to improve themselves — it will only hurt them when the economy begins to lose steam.