Do high skilled immigration policies work? – Yes

Bottom line, increasing the high skilled work force through immigration works well, and better when a points system, without regard to job matching, is used rather than a system of finding labor shortages and matching workers with jobs.

From “The Gravity of High-Skilled Migration Policies,” by Mathias Czaika1 & Christopher R. Parsons, in Geography (2017) 54:603–630

To the best of our knowledge, this article provides the first test of the efficacy of policies targeting high-skilled migrants in a comparative cross-country setting.

By 2015, approximately 44 % of the 172 United Nations member states declared an explicit interest in increasing their numbers of high-skilled migrants….for spurring technological progress, raising productivity, and fostering economic growth. These changing policy objectives have been accompanied by a large rise in high-skilled migration. Between the last two census rounds, in 2000/2001 and 2010/2011, OECD countries witnessed an unprecedented 70 % rise in the number of tertiary-educated migrants to 35 million. …. the effectiveness of such policies remains contested.

The key result of this study is that supply-side policies—for example, points-based systems (PBS)—are much more effective in attracting and selecting high-skilled migrants than are demand-led policies, including job offer systems, labor market tests, and shortage lists.

Importantly, we adopt two measures of skill. The first, which we refer to as high skilled, includes all those in the first three major groups of the International Standard Classification of Occupations (ISCO) 2008: (1) managers, senior officials, and legislators;(2) professionals; and (3) technicians and associate professionals…. Our data capture, on average, more than 700,000 skilled migrants per year from 185 origins who reside in 10 OECD destinations

Findings:

Even though all 10 destination countries are highly developed, an increase in high-skilled wages of 10 % is associated with an increase in high-skilled immigration flows of between 7 % and 11 %. [i.e. high skilled immigrants are associated with rising, not falling, wages.]

Bilateral agreements aimed at recognizing foreign qualifications are associated with an increase in the number of high skilled migrants by 30 % to 60 %.

UK, Canada, New Zealand and Australia use a points based system. [Other countries govern immigration by setting demand goals. This is the case with the U.S.]

Two of the three demand-driven instruments—the need to obtain a job offer, and shortage lists—significantly deter the absolute inflow of high-skilled migrants. Countries requiring a job offer recruit almost one-half as many high-skilled migrants. Labor market tests, however, have no influence on high-skilled migration flows in the baseline models. Shortage lists, which are even more rigid in preselecting high-skilled migrants, seem to represent an additional barrier for recruiting high-skilled migrants in large numbers.

Our main result is that Point Based Systems [PBSs] appear to represent the most effective policy for attracting high-skilled migrants. Major PBS countries (Australia, Canada, New Zealand, the United Kingdom) attract, on average, 1.5 times the number of high-skilled migrants when compared with countries that adopt alternative policy tools.

The provision of permanency rights is also an important incentive for high-skilled migrants. Countries providing a road to permanency attract, on average, double the number of high-skilled migrants in comparison with those that do not.

PBSs again prove the most effective in improving the incoming distribution of skills at destination. PBSs assess skill profiles and filter labor migrants according to perceived long-term skill requirements and therefore are effective instruments not only for recruiting relatively large numbers of high-skilled migrants but also for shifting the skill composition in favor of the highly skilled

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