[Senate Hearing 109-775]
[From the U.S. Government Printing Office]

                                                        S. Hrg. 109-775

                       SKILLS-BASED POINT SYSTEM



                                 OF THE

                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION




                           SEPTEMBER 14, 2006


 Printed for the use of the Committee on Health, Education, Labor, and 

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                   MICHAEL B. ENZI, Wyoming, Chairman

JUDD GREGG, New Hampshire            EDWARD M. KENNEDY, Massachusetts
BILL FRIST, Tennessee                CHRISTOPHER J. DODD, Connecticut
LAMAR ALEXANDER, Tennessee           TOM HARKIN, Iowa
RICHARD BURR, North Carolina         BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia              JAMES M. JEFFORDS (I), Vermont
MIKE DeWINE, Ohio                    JEFF BINGAMAN, New Mexico
JOHN ENSIGN, Nevada                  PATTY MURRAY, Washington
ORRIN G. HATCH, Utah                 JACK REED, Rhode Island

               Katherine Brunett McGuire, Staff Director
      J. Michael Myers, Minority Staff Director and Chief Counsel


                            C O N T E N T S



                      THURSDAY, SEPTEMBER 14, 2006

Enzi, Hon. Michael B., Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama, 
  opening statement..............................................     3
Beach, Charles M., Professor of Economics, Queen's University....     4
    Prepared statement...........................................     5
Borjas, George J., Professor of Economics and Social Policy, 
  Kennedy School of Government, Harvard University...............    12
    Prepared statement...........................................    15
Massey, Douglas S., Office of Population Research, Princeton 
  University.....................................................    18
    Prepared statement...........................................    19
Tonelson, Alan, Research Fellow, U.W. Business and Industry 
  Council Educational Forum......................................    21
    Prepared statement...........................................    24

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Report for Congress, July 2006...............................    42
    Katherine M. Donato, Douglas S. Massey, and Brandon Wagner...    58
    Response to Questions of Senator Kennedy and Senator Sessions 
      by Charles M. Beach........................................    72
    Response to Questions of Senator Kennedy by Douglas S. Massey    74
    Response to Questions of Senator Sessions by George J. Borjas    75
    Letter from Monte Solberg to Senator Sessions................    77


                       EMPLOYMENT-BASED PERMANENT
                     OF A SKILLS-BASED POINT SYSTEM


                      THURSDAY, SEPTEMBER 14, 2006

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:34 a.m., in 
Room SD-430, Dirksen Senate Office Building, Hon. Mike Enzi, 
chairman of the committee, presiding.
    Present: Senators Enzi and Sessions.

                   Opening Statement of Senator Enzi

    The Chairman. Good morning and welcome to today's hearing 
on employment-based, permanent immigration. U.S. immigration 
policy is currently the focus of considerable public discussion 
and debate. Our policies regarding immigration have broad-
reaching, practical implications, including ones that impact 
the diverse jurisdictional areas of this committee. Immigration 
policy affects our educational systems and training programs, 
our health care delivery and insurance systems and our overall 
labor market economics. As this public policy discussion and  
component of that policy, which has received less notice than 
some others, is the issue of permanent immigration. It is, 
however, a component that deserves greater attention.
    Last year, some 1.2 million immigrants were accorded legal 
permanent resident status, and, over the last decade, permanent 
immigration status has been accorded to a little less than 1 
million immigrants annually. Among those groups that are 
accorded permanent resident status are those whose admission is 
employment-based. The relative number of individuals that 
obtain permanent resident status through employment-based 
immigration and the criteria by which their suitability for 
permanent residency is determined are issues that have been 
faced recently by other countries. In reviewing our own 
immigration policies, it makes sense to review the experiences 
of other countries that have dealt with many of the same issues 
that face us today. Two countries, Canada and Australia, have 
implemented reforms regarding employment-based permanent 
immigration. Both countries utilize a skills-based point system 
to determine matters relating to permanent residency. Today's 
hearing will examine both of these systems in an effort to 
determine their potential value in the context of U.S. 
immigration policy.
    We are fortunate to have with us this morning a 
distinguished panel of experts to provide us with their 
insights and views on these issues. Charles Beach is Professor 
of Economics at Queens University in Ontario, Canada, where he 
also serves as the Director of the Institute for the Study of 
Economic Policy. He has researched and published extensively in 
the fields of public policy, income distribution and labor 
market analysis and is currently engaged in extensive research 
in the area of Canadian immigration policy. He is the founder 
of the Canadian Econometric Study Group and the Canadian 
Econometric Research Forum as well as Program Director of the 
Canadian Labor Market and Skills Researcher Network. Welcome.
    George Borjas is the Scrivner Professor of Economics and 
Social Policy at the Kennedy School of Government at Harvard 
University as well as Research Associate at the National Bureau 
of Economic Research. He is the author of a number of books and 
has written over 100 scholarly articles on labor market issues 
and immigration policy. His work appears regularly in major 
magazines, newspapers and editorials. Both Business Week and 
the Wall Street Journal have called him America's leading 
immigration economist. Thank you for being here.
    Mr. Douglas Massey is the Bryant Professor of Sociology and 
Public Affairs at Princeton University. His research efforts 
have focused on issues of international migration. He is the 
author of numerous scholarly works, including most recently, 
``Crossing the Border: Research from the American Migration 
Project'' and ``International Migration: Prospects and Policies 
in the Global Market.'' He served as President of both the 
American Sociological Association and the Population 
Association of America. Thank you for being here.
    We also have with us Alan Tonelson, who is a Research 
Fellow at the U.S. Business and Industry Educational 
Foundation, a Washington, DC. research association studying the 
issues of national security, technology and economic policy. He 
is the author of a number of books and articles on economic, 
domestic and foreign policy. He has previously served as a 
Fellow on the Economic Strategy Institute and as Associate 
Editor of Foreign Policy. Welcome to you and to all of you on 
behalf of the committee, we thank you for your willingness to 
participate in today's hearing.
    We are also fortunate today to have with us Senator Jeff 
Sessions of Alabama, who has been a leader in the Senate with 
respect to immigration issues; and, who has encouraged the 
review and study of other immigration systems. He suggested 
that this kind of forum would be a good way to build a record 
that we can utilize as we explore the issues of permanent 
immigration. Unfortunately, permanent immigration is a 
component of overall immigration policy that is too often 
    I do have to say because of my schedule this morning, I'll 
be unable to remain for the entire hearing and Senator Sessions 
has graciously offered to chair the hearing. I would also, 
again, say thanks to each of our distinguished panelists. I 
look forward to reviewing your testimony and your responses and 
I have some questions that I'll hope to have answered. The 
record will remain open so that committee members can submit 
written questions to the witnesses within 10 days of the 
hearing and we would appreciate your expeditious effort to 
answer those questions. That's the way that we'll be able to 
turn this issue into reality.
    Senator Kennedy is not here so I'll turn the proceedings 
over to Senator Sessions and be a participant. I'll pass the 

                 Opening Statement of Senator Sessions

    Senator Sessions [presiding]. All right. You're passing the 
gavel already. Senator Enzi, thank you for your leadership. We 
treated immigration--and it is appropriately assigned to the 
Judiciary Committee, which I am a member, as more of a law 
enforcement issue and enforcement question and that's where the 
debates have all focused. But in truth, immigration is a very, 
very important matter for our national economy. It is very 
important for labor, which this committee has jurisdiction of 
and oddly, in this whole process of the debate and I was in the 
Judiciary Committee and was involved on the Floor, we had 
almost no discussion of the great issues of immigration about 
how immigration can benefit a Nation, how to maximize that 
benefit, how to create an immigration policy that selects the 
people who are going to be most successful in the country and 
by inference, will be most beneficial to that country. It's 
just a logical thing that we should, as we go forward, 
    In the Judiciary Committee we had one panel, at my request, 
with the economists. Basically after the die had been cast on 
the immigration bill. One or two of the economists said this 
and the others nodded their heads and it is consistent with 
what Professor Borjas said in his book, Heaven's Door--which I 
think is the most authoritative compilation of data on 
immigration afoot today--and it is, the first thing a nation 
should do, is to decide whether or not immigration is in their 
national interest and should it be in their national interest? 
In other words, who is being served? Is it the people who want 
to come or is it the nation who chooses who to receive. I think 
the answer is pretty obvious, that the nation ought to set a 
policy that serves its national interest. Any other argument, I 
think, is not sound and what they said at that other hearing 
was, once you make that decision, then it is pretty easy to do 
a rational analysis of how to create a system that serves the 
national interests. One of the things we want to think about 
is, how many should come and in what fields of work, whether it 
is skilled or low-skilled and a legitimate interest of this 
committee is how it effects labor in this America and the 
working people because we're passing bills and trying to help 
working people in America in a lot of different ways and we 
need to ask how immigration impacts our system.
    So I'm glad that you've agreed to have this. This will be a 
part of the record. We have, in these weeks here that we wrap 
up this session, a lot of things happening at this very moment. 
I should be in another hearing but I'm not and we're going to 
take this record that we have today and I assure you, other 
Senators will become educated on some of the issues that are 
being raised here because I'll make sure that they are.
    Senator Enzi, do you have any questions? Do you want me to 
start with some questions? I guess the first thing I would say 
that is most--oh, excuse me. I need a good chairman here, 
somebody who is used to presiding. We are delighted to hear 
from you at this point and then we'll go into our questions 
    Mr. Beach. Tell us about the Canadian plan.


    Mr. Beach. Yes. Can you hear me all right? Thank you very 
much for inviting me to speak before the committee. Also, I 
want to express my wholehearted sadness and sympathy for your 
loss 5 years ago this week.
    Canada has one of the major--is one of the major immigrant 
receiving countries in the world and we've had about 30 years 
of experience in running a point system, which will be one of 
the main issues of discussion in today's session. I simplify a 
bit but there are basically three major classes of immigrates 
to Canada, corresponding to the different goals of immigration 
policy. One is family class immigrants for family unification. 
That represents about 27 percent of all immigrants coming in. 
The figures are for 2000 but they are not much different now. 
Second, is the independent or economic class, which are the 
group of immigrants and their dependents who come in under an 
evaluation system or point system and that is about 59 to 60 
percent of all immigrants. That's quite different from the 
United States. Third, there is a humanitarian class, largely 
refugees, which is about 13 percent of the total.
    Since the 1980s, there have been three major changes in 
immigration policy in Canada. In the mid-1980s, Canada shifted 
the total immigration levels from its previous regime, which 
was called the tap on, tap off policy, where in recessions, it 
is less absorbed to the capacity of the economy. The total 
immigration levels were moved down a bit. You had expansions 
when the absorbed to capacity increased, it was moved back up.
    By the 1980s, for reasons that may come out in questions 
here, Canada changed to a policy of essentially tap on at a 
fairly high level, right through, including through a quite 
severe recession in the early nineties. One can debate that, 
but, that is still the approach we use.
    The second major change is the policy shifted away from 
emphasis on family class immigrates toward an emphasis on 
independent class immigrates that come under the point system. 
So to give you an idea of orders of magnitude, between 1980 and 
2000, the number coming in under the point system rose from 35 
percent to above 60 percent. That is quite a substantial 
    Third, the weights are embodied in the point system and we 
identify and evaluate skills under which to evaluate 
prospective immigrants. That has changed in the 1990s from a 
perspective of what is called occupational gap-filling or 
targeted employment. You see that there is a shortage in some 
occupations so you want to try to attract a bunch of people in 
that occupation, away from that to one based on much broader, 
we'll call human capital perspectives on things like language, 
education and that sort of thing and age, and again, that can 
come out in more discussions.
    Basically, those three changes or at least the last two, 
signal a shift in perspective immigration toward a much longer 
view rather than a short-run, cyclical type response situation. 
The Canadian immigration policy, then, operates--I view it in 
terms of three sets of policy levers. One is the total level of 
immigration, which can be changed to some extent, year to year. 
Second is a portion of that total that comes under the point 
system and third is the nature of the wigs embodied in the 
point system itself. A recent study by some colleagues and 
myself looked at the effects of these three levers on various 
skill dimensions of arriving immigrants, such as education, age 
and English/French language fluency of arriving immigrates and 
the study found essentially two points for our purposes. First, 
the point system works in the sense that increase in the 
weights on a specific skill dimension does, indeed appear to 
have an effect in raising average skill levels of incoming 
immigrants and we have estimates as to the size of these 
effects. Second, changing--interestingly, changing the 
proportion of these three main levers. I talked about total 
inflow, the proportion that come under the point system and the 
weights in the point system. It is the second one. The 
proportion coming in under the point system as economic class 
immigrants, which appears to have the strongest impact, not 
just in our own studies but in several others that have been 
done as well.
    So by way of conclusion, I think that bringing in a skill-
based point system means that you gain useful policy tools that 
can have an effect on raising average skill levels of arriving 
    [The prepared statement of Mr. Beach follows:]
                 Prepared Statement of Charles M. Beach
       1. background features of the canadian immigration system
    The last decade has seen major changes in immigration policy in 
Canada, one of the leading immigrant-receiving countries and the one 
with about the highest per capita immigration rate in the world.
    Figure 1 shows the profile of total immigration levels since 1980. 
In 1985, the total number of immigrants troughed at 84.3 thousand. The 
number then shot up in 1987 to 152.1 thousand and continued rising to 
above 250,000 in 1992 and 1993. It then drifted down to 173.1 thousand 
in 1998 and then moved up again to above 250,000 in 2001, from which it 
has continued in the 220,000-230,000 immigrants per year range (out of 
a population of about 30 million). The main feature of these results is 
the distinct up-shift in total immigration levels in Canada beginning 
in the mid-1980s that has generally continued.
    Figure 1 also shows the number of immigrants in the major immigrant 
classes. There are basically three such classes. Independent (or 
Economic) class immigrants are those immigrants (and their dependants) 
who are assessed for admission through a Point System. It includes 
business class immigrants in the entrepreneur, investor and self-
employment categories, and a nominated or assisted relatives class 
since these applicants also have to be assessed under the Point System. 
The second major immigrant class is the Family class (family 
unification), and the third is the Humanitarian class (mainly 
refugees). The Family class immigrants are admitted solely on the basis 
of kinship. Applicants in the latter two classes are not assessed under 
the Point System. Figure 1 shows that the Family class and the 
Independent (or Economic) class are the two largest classes. One also 
notes from Figure 1 the marked cyclical nature of Economic class 
inflows which generally increase in periods of economic growth in 
Canada and decrease during periods of recession (1981-1983 and 1990-
1992), along with the general decline in Family class numbers since 
    Since 1980, there has also been substantial change in the country 
or region of origin of Canadian immigrants (see Figure 2). The most 
noticeable change here has been the increase in the numbers arriving 
from the Asia and Pacific regions and, to a lesser though still 
significant degree, from Africa and the Middle East. In the mid-1980s, 
the numbers of immigrants arriving from Asia and Pacific ran around 
30,000-35,000 a year, but by 1992 had moved up to over 100,000 a year 
and peaked in 2001 at about 133,000 arrivals. Those from Africa and the 
Middle East in the early to mid-1980s averaged around 8,000-9,000 a 
year, but by 1991 moved up to over 40,000, and since 2000 arrivals have 
run between 40,000 and 50,000 a year. Meanwhile, landings from Europe, 
United Kingdom and the United States have been relatively stable over 
the whole period with 41.8 thousand from Europe and the United Kingdom 
and 7.5 thousand from the United States in 2004. In percentages terms, 
though, they represent a declining share of the total inflow. There 
have also been fluctuations in the numbers arriving from South and 
Central America which averaged 14,000-17,000 a year in the early 1980s, 
then moved up to 37,000 by 1991 and have since eased off to 19,000-
22,000 a year since 2001. The main point here is that there has been a 
major shift in source country away from Canada's previously traditional 
source regions of the United Kingdom, United States, Western Europe, 
and English-speaking Commonwealth countries.
    One of the distinguishing features of the Canadian system is that 
the Immigration Act gives Citizenship and Immigration Canada (CIC), 
through Cabinet approval and in consultation with the provinces, 
considerable flexibility to set target levels for immigration flows by 
immigrant class and to make changes to the relative weights built into 
the Point System. No separate act of Parliament is required to make 
these year-to-year changes, so there is considerable flexibility in how 
the policy levers of the system can be adjusted.
    Another distinguishing feature of the Canadian system is its Point 
System which was brought in in 1967 as an objective way to assess the 
admissibility of prospective immigrants while at the same time up-
grading the skill level of new arrivals. Table 1 sets out the 
categories under which a prospective Independent candidate for 
admission is judged along with the maximum number of points in each 
factor and the pass mark needed to be admitted. The table covers the 
period from the introduction of the Point System in 1967 until 
recently. Despite major revisions to the Immigration Act over the last 
three decades (i.e., in 1978 and 2002), the Point System has remained 
at the core of assessing which Independent (or Economic) class 
immigrants will obtain entry visas.
    Under the Point System, prospective immigrants originally needed to 
amass at least 50 out of a possible 100 points to obtain an entry visa 
(nominated relatives received a 15-point bonus to cover a short-fall in 
points earned in evaluating their case for admission). As Table 1 
shows, prospective immigrants were judged on a wide variety of factors, 
for example, age, education, work experience, occupational demand, etc. 
Table 1 also shows that the weights assigned to these factors have 
changed over time. Indeed, some categories actually disappeared while 
new ones were introduced. Initially, at least, the weighting scheme for 
the first two decades after the introduction of this scheme in 1967 
reflected past immigration policy in the sense that it focused on 
occupational needs in the economy at a particular point of time. The 
total number of points awarded to occupational-directed categories 
(i.e., occupational skill, experience, occupational demand, and bonus 
points for designated occupations) totaled 43 out of a possible 100 
points in 1986. The prospective migrant needed to get a certain number 
of points out of 100 to be admitted to Canada. It is not necessary to 
get points in every category. Hence a prospective migrant could score 
high points for education, age, etc., and zero for occupation demand, 
and still be admitted.
    Now consider some of the skill characteristics of landed immigrants 
since 1980. In Table 2, sample means are presented for education and 
admission class for immigrants landed in Canada in 1980, 1990 and 2000. 
The proportion of immigrants with an undergraduate or graduate 
university degree rose dramatically over the period from 5.8 percent 
and 1.8 percent, respectively, in 1980 to 25.1 percent and 9.0 percent 
in 2000. The larger part of each increase occurred in the 1990s and is 
almost surely due to the reform of the Point System used to select 
immigrants to Canada under the skilled worker or Economic class 
category of admission. The changes in 1993 specifically led to a large 
increase in the weight placed on university education in selecting 
skilled immigrants.
    In contrast, the proportion of new immigrants with post-secondary 
education below the university level rose from 16.5 percent in 1980 to 
20 percent in 1990. However, it declined back to below its 1980 level 
at 15.6 percent by 2000. The other large change in the education 
distribution of newly landed immigrants over the period is the decline 
at the secondary education level--from 59 percent in 1980 to 35 percent 
in 2000. The overall result has been a fairly steady increase in the 
average years of education of arriving immigrants.
    The distribution of new immigrants across the different admission 
categories has also varied considerably over the 20-year period. The 
proportion of new immigrants in the Economic category rose from 34.9 
percent in 1980 to 44.2 percent in 1990 then to 58.7 percent in 2000. 
These increases coincided with decreases in the share of new immigrants 
arriving under the Family class (35.9 percent in 1980 to 26.6 percent 
in 2000) and the Humanitarian class (28.2 percent in 1980 to 13.2 
percent in 2000). The larger part of the decline in the share of the 
Humanitarian category occurred between 1980 and 1990, while the larger 
part of the decline in the Family class (and the increase in the share 
of the Economic category) occurred between 1990 and 2000. The 
Humanitarian class intakes are, of course, largely influenced by 
refugee crises around the world.
         2. recent major reforms in canadian immigration policy
    The 1980s and 1990s saw three major changes in immigration policy 
in Canada. These also highlight three distinct policy levers available 
to policymakers. First, the approach to handling total immigration 
levels changed. Up until the middle 1980s, Ottawa had traditionally 
followed a ``tap-on/tap-off '' policy where immigration inflow levels 
were allowed to rise in periods of economic growth when there was a 
high absorption capacity for new labor market participants, and then 
the levels were purposedly reduced in times of recession when 
absorption capacity was weak. In the middle 1980s, however, total 
immigration levels were substantially raised (see Figure 1) and then 
kept on at a relatively high level right through the quite severe 
economic recession of the early 1990s. This was done perhaps partly for 
political reasons. But it also marked the beginnings of a shift of 
perspective on immigration policy away from short-run or cyclical 
objectives and toward a longer-run more economic growth-oriented 
    The second major change in immigration policy was shift away from 
an emphasis on Family-class immigrants and a family reunification role 
of immigration toward an emphasis on Independent or Economic-class 
immigrants (and their dependants). This occurred in the early to mid-
1990s and was spurred on by the rapidly rising costs of immigration in 
the recession of the early 1990s and by a general public perception of 
abuses in the system at the time. But again, it illustrated an on-going 
shift of underlying perspective that immigration should be serving a 
skill development role for the economy and a policy tool to foster 
labor productivity and economic growth (which were lower in Canada than 
in the United States causing some concern in the Canadian government). 
So a priority became to raise the proportion of total immigrants who 
would be coming in under a skill-based screening system. (Policy also 
was changed to narrow the definition of ``family'' in the Family class 
category away from the previous extended-family definition to a more 
North American style nuclear-family concept.)
    The third change, also in the mid-1990s, was to the Point System 
under which Economic class immigrants are evaluated for entry. 
Previously, the weights in the Point System had been based on an 
occupational preference or gap-filling or targeted employment model 
where specific occupational needs were identified and those applicants 
who could fill these needs were given preference for admission. But by 
the mid-1990s there was growing frustration with this approach. It was 
an attractive concept, but it was bedeviled by implementation problems 
in actual practice. To be useful, the program had to get into quite 
detailed occupational breakdowns (e.g., a civil engineer is not the 
same thing as an electrical engineer), and these were very cumbersome 
to deal with by an administrative bureaucracy. There were also 
frustrating lags in identifying local labor market needs, aggregating 
this information up, and then conveying it in timely fashion to 
immigration offices abroad for dissemination to prospective applicants. 
By the time this process was done, the original labor shortage may no 
longer exist or--even worse perhaps--the economy was now in a recession 
and all applications were being put on hold. In general, this approach 
led to an unwieldy bureaucracy that was felt to be unresponsive and not 
sufficiently timely. It also led to criticism and frustration both 
abroad and at home. And there was wariness that the pace of industry 
restructuring (under NAFTA) and economic change would be speeding up 
with accelerating information technology developments.
    So after an extensive review, in place of the gap-filling model was 
substituted an earnings or human capital model perspective. Under this 
approach, specific occupational needs were reduced in the Point System 
weighting scheme while additional points were awarded to education, age 
(particularly youthfulness as a proxy for flexibility and adaptability) 
and official language fluency (all three of these categories had been 
present from 1967 but were given lower weights than those categories 
dealing with occupational demand). The rationale for the change was 
that the higher prospective immigrants scored in these three categories 
the more easily they would adapt to their new home country and hence 
the more rapid their ascent to parity in earnings to similarly placed 
native-born workers. Thus by the mid-nineties, education, facility in 
one or both of the native languages (i.e., English and French) and age 
accounted for 59 of the 100 total points, with only 70 points needed 
for the pass mark. This shift in weights in Canada signalled a move 
toward a longer-run view of immigration policy. Less emphasis was 
placed on gap filling and more on the factors that supposedly 
influenced the long-run adaptability of the new migrant.
    This discussion, then, highlights the three policy levers I wish to 
focus on in this statement: (i) the total level of immigrant inflows in 
a year, (ii) the proportion of the total inflow in the Economic class 
category, and (iii) the Point System weights for the general skill 
levels of educational attainment, (youthful) age, and (English/French) 
language fluency. In the Canadian Point System, zero points are awarded 
for a principal applicant having less than a high school diploma, 
maximum points for a 4-year university degree, and partial points for 
various types of high school and post-secondary training. In the case 
of age, full points are awarded for principal applicant's age between 
21 and 49, and decreasing partial points for age further away from the 
21-49 age interval. In the case of language, zero points are awarded if 
the principal applicant speaks English and French very haltingly, full 
points if they are fluent in both official languages, and partial 
points based on reading, writing and speaking of English and French.
       3. impacts of the point system and policy levers on skill 
                         of canadian immigrants
    The discussion in this section follows the analysis of a recent 
empirical study by Charles Beach, Alan Green and Christopher Worswick 
entitled ``Impacts of the Point System and Immigration Policy Levers on 
Skill Characteristics of Canadian Immigrants'' (March 2006) that has 
been provided to the committee. This paper examines how changes in the 
above three immigration policy levers actually affect the skill 
characteristics of immigrant arrivals using a unique Canadian immigrant 
landings database consisting of all immigrants who arrived in Canada 
between 1980 and 2001. The skill characteristics of arriving immigrants 
that are examined in this study are their level of education, their 
age, and their fluency in either English or French. We use regression 
statistical techniques to estimate reduced-form equations in order to 
investigate whether the above three sets of policy lever changes (as 
explanatory variables) have indeed had identifiable effects on these 
three skill characteristics (as dependent variables) of the arriving 
immigrants to Canada over the 1980-2001 period. These three skill 
dimensions are generally acknowledged as the major skill indicators for 
immigrants that the literature focuses on.
    Several hypotheses are examined in this paper relevant to the 
effect on arriving immigrants' skill levels of our three policy 
drivers. The first refers to total immigration inflow rates: does a 
larger size of immigrant inflows reduce the overall skill levels of 
arriving cohorts as the larger numbers of immigrants are likely to be 
closer to the Point System cut-off line (in the case of Economic class 
immigrants) and to bring in more relatives (in the case of Family class 
immigrants) who generally adjust more slowly in integrating into the 
Canadian labor market? The second refers to Economic vs. non-Economic 
class immigrants: do Economic class immigrants have higher average 
skill levels, and thus other things being equal, does an increase in 
the share of Economic class immigrants in response to shifting 
government priorities raise the overall skill levels of arriving 
immigrant cohorts since it is the Economic class arrivals who are 
essentially admitted on the basis of their skill? The third hypothesis 
refers to operation of the Point System: does increasing the Point 
System weight on some skill dimension--such as educational attainment--
indeed have the desired effect of raising overall skill levels of 
immigrant arrivals in this dimension? And the fourth refers to business 
cycle effects: does a weaker labor market in Canada result in 
attracting fewer skilled immigrants so that overall skill levels of 
arriving cohorts of immigrants are reduced? And, by extension, does a 
weaker labor market in the United States (a substitute destination), 
ceteris paribus, lead to an increase in the overall skill levels of 
immigrants selecting to come to Canada?
    The answer to each of these hypotheses turns out to be ``Yes''.
    Five main findings arise from the empirical analysis of this paper 
and that may provide some useful input to the current U.S. debate. 
First, with respect to total immigration rates, it has been found that 
increasing overall annual inflows of immigrants lowers the average 
skill levels of the arriving cohort. This reduction in skill levels 
occurs most strongly for educational attainment of arriving immigrants, 
more moderately with respect to age of arriving immigrants, and very 
weakly (if at all) for official language fluency of immigrants. For 
example, raising total inflow levels by 100,000 per year (or by about 
35 percent from recent levels) is estimated to reduce average years of 
education of Economic class immigrants by 2.6 percent, to increase 
their average age by 1.7 percent, and to reduce the average rate of 
English or French language fluency by 0.2 percent.
    Second, for a given level of total inflow, increasing the 
proportion of skill-evaluated or Economic class immigrants--at least in 
the way they are designated in the Canadian system--is found to raise 
the average skill levels of immigrants as a whole. Increasing the 
Economic class share in total immigration has its strongest effect on 
official language fluency of arriving cohorts, has a significant effect 
on average education levels, and has a moderate effect on average age 
of arriving immigrants. For example, raising the Economic class share 
of total immigration by 10 percentage points is estimated to increase 
average levels of education of all immigrants by 1.5 percent, to reduce 
their average age by 2.0 percent, and to increase their official 
language fluency rates by about 2.7 percent.
    Third, it is found that business cycle effects on skill level 
outcomes of immigrants to Canada are highly statistically significant, 
and generally operate so that higher Canadian unemployment rates reduce 
average skill levels of arriving immigrants and higher U.S. 
unemployment rates have the opposite effect.
    Fourth, with respect to the operation of the Canadian Point System 
itself, it has been found that increasing the weights on specific skill 
dimensions within the Point System schedule indeed has the intended 
effect of raising average skill levels in this dimension among skill-
evaluated applicants. Basically, the Point System does appear to work 
as it is intended. The strongest effects occur for education, 
moderately strong for language fluency of immigrants, and rather weak 
effects occur on age of arriving immigrants. For example, if there is a 
10 percentage point increase in the weight allocated to a specific 
skill measure within the Point System, the result is that the average 
years of education of principal applicants are estimated to increase by 
2.7 percent, their average age declines by 0.6 percent, and their 
average official language fluency rate goes up by 1.2 percent.
    This study identified three broad sets of policy tools for bringing 
about improvements in immigrant outcomes. One is a change in the total 
rate of inflow of immigrants, the second is a change in the Economic 
class share of total immigration, and the third is various changes in 
the Point System weights allocated to various skill dimensions. But 
which of the three policy tools appears to be most effective in 
bringing about desired changes in the skill outcomes of arriving 
immigrants? The proportion of Economic class immigrants seems to have 
the strongest across-the-board impact. The education outcome variable 
also stands out as being the most responsive among the three-skill 
dimensions. In general, the Point System appears to have strong effects 
on education outcomes of arriving immigrants, moderate effects on 
language fluency outcomes, and rather weak effects on age outcomes of 
arriving immigrants.
                   4. conclusions and recommendations
    We can identify two sets of conclusions: those based on the 
statistical analysis of policy lever effects, and those based on past 
Canadian experience with their Point System.
    Turning first to the statistical results of the previous section, 
four points deserve mention:

    1.1 Increasing the total inflow rate of immigrants lowers the 
average skill level of arriving immigrant cohorts.
    1.2 Increasing the proportion of Economic class immigrants raises 
the average skill levels of immigrants as a whole.
    1.3 Increasing the weight on specific skill dimensions within the 
Point System schedule indeed has the intended effect of raising average 
skill levels in this dimension among skill-evaluated immigrants. 
Basically, the Point System works as intended.
    1.4 In terms of the relative effectiveness of the alternative 
policy levers:

     the proportion of Economic class immigrants seems to have 
the strongest effects;
     the level of education of immigrants stands out as being 
the most responsive among the three-skilled dimensions; and
     the Point System appears to have strong effects on 
immigrants' education levels, moderate effects on language fluency 
outcomes, and rather weak effects on the average age of arriving 

    Turning next to the lessons from Canadian experience with their 
Point System, one can highlight several further points:

    2.1 A human capital-based Point System seems to be an improvement 
over an occupational preference-based system because of operational 
problems with the latter.
    2.2 By bringing in a Point System (applied to a skill- or 
occupation-evaluated class of immigrants), you would gain useful policy 
tools which can have effects of raising average skill levels of 
arriving immigrants.
    2.3 If bringing in a Point System for a class of immigrants, try to 
keep it relatively simple and transparent and based on a relatively 
small number of skill dimensions such as education, age and language 
    2.4 If bringing in a Point System with substantial weight placed on 
the education level of immigrants, give some attention to how to deal 
with issues of foreign credential recognition.
    2.5 If bringing in a Point System, allow for some input from local 
and regional authorities on their evolving labor market needs.
    2.6 If bringing in a Point System, you might give some thought to 
allowing points for the spouse's or family unit's skill characteristics 
rather than just the skill characteristics of the principal applicant 
of the family unit.
    2.7 If bringing in a Point System, one can allocate points for 
designated occupational needs, so use of a Point System can be viewed 
as complementary to an occupational gap-filling approach rather than a 
direct alternative to it.

    Charles Beach was born in Montreal in 1947. He attended McGill 
University and did his Ph.D. at Princeton University. Since 1972 he has 
taught economics at Queen's University in Kingston, Ontario, Canada. 
His areas of research have been on applied labor market analysis and 
distribution of income. He is co-editor (with Alan Green and Jeffrey 
Reitz) of Canadian Immigration Policy for the 21st Century (McGill-
Queen's University Press, 2003) and co-author (with Alan Green and 
Christopher Worswick) of ``Impacts of the Point System and Immigration 
Policy Levers on Skill Characteristics of Canadian Immigrants'' (2006). 
He is also program director on immigration for the Canadian Labour 
Market and Skills Researcher Network.

                               Table 1.--The Canadian Points System Over Time \1\
                                                [Maximum Points]
                      Factor                         1967      1974      1978        1986       1993    1997 \2\
Education........................................        20        20        12           12        16        16
Experience.......................................                             8            8         8         8
Specific vocational preparation or education             10        10        15           15        18        18
 training factor.................................
Occupational demand or occupational factor.......        15        15        15           10        10        10
Age..............................................        10        10        10           10        10        10
Arrange employment or designated occ.............        10        10        10           10        10        10
Language.........................................        10        10        10           15        15        15
Personal suitability.............................        15        15        10           10        10        10
Levels adjustment factor \3\ or demographic                                                5         8        10
Relative \4\.....................................         5         5         5
Kinship bonus \5\................................                                      10/15         5         5
Destination......................................         5         5         5
  Total..........................................       100       100       100   95-105/110   105-110   107-112
  Pass Mark \6\..................................        50        50        50           70        70        70
Source: Green and Green (1999), p. 433, plus updated information from CIC.
\1\ A discretionary allocation that can be used to control the number of persons entering over a period.
\2\ Source: Statutory Orders and Regulations 97-242 and Citizenship and Immigration Canada policy manual
  (Overseas Processing) chapter 5 under the Immigration Act 1976.
\3\ The pass mark varies by skill level.
\4\ Relative factor was eliminated as of 1986 as a selection factor for Independent/Skilled Worker applicants.
\5\ January 1, 1986 regulatory change established a ``kinship bonus'' for ``Assisted Relative'' applicants.
  Prior to the 1986 change, ``Assisted Relative'' applicants were not assessed on the following factors:
  Arranged employment, Language, Relative and Destination. Total and Pass Mark varied under each regime for the
  Assisted Relatives.
\6\ The pass mark applied to the Independent/Skilled Worker applicants.

  Table 2.--Immigrant Characteristics at Landing Level of Education and
         Admission Category, 1980, 1990, and 2000 (proportions)
                                            1980       1990       2000
    University--Post-Graduate..........      .0177      .0289      .0902
    University--Undergraduate..........      .0583      .1100      .2506
    Post-Secondary.....................      .1645      .1996      .1558
    Secondary..........................      .5898      .5316      .3526
    Elementary or Less.................      .1676      .1297      .1507
Admission Category:
    Economic...........................      .3486      .4419      .5870
    Family Class.......................      .3587      .3436      .2663
    Humanitarian.......................      .2819      .1668      .1322
    Other..............................      .0108      .0477      .0145
  Total No. of Landings................    143,136    216,402    227,313
Source: Calculations by the authors from the CLD data.

    Senator Sessions. Thank you.
    Mr. Borjas.




    Mr. Borjas. Thank you very much for providing me the 
opportunity to come before the committee to talk about my work 
and my thoughts on this issue. You are addressing issues that 
are really--unfortunately, we don't address them very often--at 
the core of the immigration debate in this country. The reason 
is that many more people want to come to the United States than 
the country is willing to admit. So because of this, 
immigration policy needs to specify a set of rules to pick and 
choose from the many, many applicants. These rules could stress 
family ties, as is done now or could stress national origin the 
way it used to be done or it could stress economic valuables 
the way Canada does or it could even be completely random, the 
way our lottery system does for 50,000 visas.
    The crucial question that is really at the core of the 
immigration debate is, which set of rules should the United 
States have if it wants to improve economic well being of its 
population? So what I want to do today is sort of summarize for 
you what an economic case for a high-skilled immigration policy 
would be, like the one that Canada has or that Australia has. 
The reason we have to consider that is that for the last 40-50 
years, there has been a pretty steep decline in the skills of 
Americans as compared to the skills of natives. Just to give 
you an idea of the extent of the decline, in 1960, the typical 
immigrant worker in the United States earned about 7 percent 
more than the typical native worker at that point in time. 
Right now, the typical immigrant worker in the United States 
earns almost 20 percent less than the typical native worker in 
the workforce today.
    One thing we know from economics is that all the skills of 
immigrants compared to the skills of natives is a crucial 
factor that determines economic impact on immigration. Why 
should we care about this? Because just think about a few 
variables that enter the equation. One thing is that, if you 
have a skilled immigrant population, those skilled immigrants 
may well have gotten much more rapidly to the U.S. labor market 
and can really make a very significant contribution to economic 
growth. If, on the other hand, immigrants lack the skills to 
adapt, they may well increase the size of the population that 
requires public assistance and increase ethnic and racial 
    On top of that, as the debate of immigration policy in the 
last few months have shown, Americans care quite a bit about 
the potential impact that immigrants have on the employment 
opportunities of native workers. Any kind of low-skill 
immigrant influx will tend to have a proportionally adverse 
impact on most skilled natives already here. In other words, 
the loss of planned demand suggests that at least in the short 
run, when immigrants arrive, they tend to affect adversely the 
employment opportunities of competing native-born workers and 
that would tend to increase the social and economic inequality 
that exists in this country.
    Last but not least, there is an additional case for making 
a high-skilled immigration policy and that is that, as I will 
discuss in a minute, it turns out economic benefits for 
immigration can be substantially improved if the immigrant 
population were much more skilled than it is today.
    So let me go through the basic factors again, in a little 
more detail. There are three parts that I want to discuss in 
particular, in the brief time I have. First of all, consider 
the fiscal impact of immigration. High-skilled immigrants earn 
more, pay higher taxes, and require fewer services than low-
skilled immigrants. So from a fiscal perspective, there is no 
doubt whatsoever that high-skilled immigration is a good 
investment, particularly when compared to the immigration of 
low-skilled workers.
    Second, what happens to productivity when there is high-
skilled immigration? Although there is some disagreement among 
economists as you've heard in the last few months, about how 
much wages fall when immigrants come into the labor market and 
compete in the workforce, I think there is actually much less 
disagreement among economists with the following proposition, 
that the net benefit from immigration would increase and 
perhaps increase substantially, if the immigrant influx were 
much more skilled than it is today.
    In some of the populations I did in my book, Heaven's Door, 
I found that the net benefits to the country would increase 
four-fold, from about $10 billion annually to $40 billion 
annually if the immigrant influx were to change from being 
predominantly low-skilled, which is what we have now, to 
predominantly high-skilled. The key reason for this increased 
gain is that a productive infrastructure of the U.S. economy, 
where an economist would cold-cap the capital stock, tends to 
be more complimentary with high-skilled workers than it is with 
low-skilled workers. So the available resources that we now 
have would be much more productive and much more profitable if 
immigrants were more skilled.
    Finally, the immigration of high-skilled workers would tend 
to have much more favorable distributional effects. Instead of 
being the low-skilled workers who are suffering from having 
more immigrants competing in the workforce, it would be high-
skilled workers who already reside in the United States who 
would face more competition and lower wages. So there would be 
less rather than more wage inequality.
    How can the United States select skilled immigrants, 
skilled workers from the pool of applicants? Well, as you have 
just heard, we can actually develop a point system that would 
reward certain economic characteristics in determining entry. 
Now, needless to say, any point system that we choose will be 
inherently arbitrary. But it isn't clear, however, that an 
existing point system like the Canadian one, is any more 
arbitrary than what we have now and by that I mean the 
following. Even though the United States would never admit 
officially that we have a point system, in fact, we do have 
one. But unlike the Canadian system, for the large bulk of 
legal immigrants, there really is only one variable we look at 
and the variable we look at is, do you have family already 
residing in the United States? So a broadening effect of that 
system to include other variables seems quite sensible from an 
economic perspective.
    Now the problem with what I've just said is that I haven't 
given you any kind of feel for what the number of visas should 
be. Even though high-skilled immigration would be beneficial to 
the United States, it is far from clear--and let me emphasize, 
it is far from clear that the argument actually implies that we 
want to have an open-door policy when it comes to skilled 
immigration. A sensible way of thinking about what the magic 
number should be is to just imagine counter factual. What would 
happen, for example, if we admitted 1 million highly skilled 
workers annually instead of our current policy? Well, just 
think about it. Over a 20-year period, we would be admitting 
roughly 20 million high-skilled workers. Well, right now, there 
are approximately 30 million college graduates working in the 
United States. Just imagine what the high-skilled labor market 
would look like if, on top of the 30 million college graduates 
now here, you added a supply increase of 20 million high-
skilled workers. Clearly, there would be a pretty sizable 
reduction in the relative wage of college graduates in this 
    This reduction that returns to a college education would 
have severe consequences in terms of being sent native students 
to continue on to college and particularly, it would affect the 
people at the margin of the college decision. So for example, a 
lot of disadvantaged native workers who face the highest costs 
in terms of going to school, would at the margins, say to 
themselves, ``Why bother going to school when the return for a 
college education has fallen so much.'' So one has to take into 
account the consequences that a high-skilled immigration 
population would have on people already here, both in terms of 
the labor market and in terms of the investment decisions of 
human capital that people will be making in the future.
    Let me just conclude by making a very brief point. There 
are difficult trade-offs involved in this decision. Pursing a 
particular immigration policy might help some groups, might 
even help the whole Nation but it may hurt other people. So the 
adoption of any specific entry rules will create winners and 
losers. It is actually helpful to keep in mind an important 
lesson from economics when thinking about this. There is no 
such thing as a free lunch. Thank you.
    [The prepared statement of Mr. Borjas follows:]
                 Prepared Statement of George J. Borjas
    The United States offers unequaled social, political, and economic 
opportunities to anyone lucky enough to enter its borders. Because of 
these opportunities, many more people want to come to the United States 
than the country is willing to admit. Consider the ``diversity 
lottery'' that the United States has held annually since 1995. Each 
year, around 50,000 visas are made available to persons originating in 
``countries with low rates of immigration to the United States.'' 
Persons living in the eligible countries can apply for a random chance 
at winning one of the coveted entry visas. Potential migrants applied 
for the 2005 drawing by submitting an application between October 5, 
2005 and December 4, 2005. This lottery drew 5.5 million qualified 
applications for the 50,000 available visas.
    Because of the excess demand for entry visas, immigration policy 
has to specify a set of rules to pick and choose from the many 
applicants. These rules may stress family ties (as is currently done 
for the vast majority of legal immigrants), or national origin (as used 
to be done), or socioeconomic characteristics (as is done in other 
countries such as Australia and Canada). Which entry rules should the 
United States have?
    Before 1965, immigration to the United States was regulated by the 
``national origins quota system.'' In that system, the fixed number of 
entry visas was allocated on the basis of national origin, with each 
country's share depending on the representation of that ethnic group in 
the U.S. population as of 1920. As a result, Germany and the United 
Kingdom received almost two-thirds of the available visas. Immigration 
from Asia was effectively banned. Finally, few persons migrated from 
Latin America despite the fact that the national-origins quota system 
did not set a numerical limit on migration from countries in North and 
South America.
    The rekindling of the immigration debate has its roots in the 1965 
Amendments to the Immigration and Nationality Act. The 1965 Amendments 
(and subsequent minor legislation) repealed the national origins quota 
system, set a world-wide numerical limit, and enshrined a new objective 
for awarding entry visas among the many applicants: the reunification 
of families. In 2005, almost 60 percent of the legal immigrants entered 
through one of the family reunification provisions of the law.
    The policy shifts in the 1965 Amendments had a profound impact on 
the size of the immigrant flow into the United States. Even though only 
250,000 legal immigrants entered the country annually during the 1950s, 
almost 1 million were entering by the 1990s. As a result of these 
trends, and also because of the rapid increase in the number of illegal 
immigrants, the proportion of foreign-born persons in the population 
began to rise rapidly, from 4.7 percent in 1970, to 7.9 percent in 
1990, to over 11 percent by 2000.
    The post-1965 resurgence of large-scale immigration to the United 
States has motivated many researchers to document and examine various 
aspects of the economic and social consequences impact of immigration. 
A key result in that literature is that the relative skills of the 
immigrant population have dropped precipitously since 1965. In 1960, 
for example, the typical immigrant earned about 7 percent more than the 
typical native worker. By 2000, the typical immigrant earned about 19 
percent less than the typical native worker. It is often argued that 
this relative decline in immigrant skills can be attributed to the fact 
that current U.S. immigration policy over-emphasizes family links 
between U.S. residents and visa applicants in awarding entry visas, and 
largely ignores the skills of the applicants. The deteriorating 
economic status of the immigrant population has sparked a debate over 
whether the goal of immigration policy should be shifted away from 
family reunification, and should focus instead on the potential 
economic impact of the immigrants.
    We care about the relative skills of immigrants for a number of 
reasons. For example, immigrants who have high levels of productivity 
and who adapt rapidly to conditions in the host country's labor market 
can make a significant contribution to economic growth. Conversely, if 
immigrants lack the skills that employers demand and find it difficult 
to adapt, immigration may increase the size of the population that 
requires public assistance and exacerbate ethnic and racial inequality.
    Similarly, the debate over immigration policy has long been fueled 
by the widespread perception that immigration has an adverse effect on 
the employment opportunities of natives. A key insight of economic 
theory is that immigration has distributional impacts, reducing the 
income of workers who compete with immigrants and raising the income of 
those who employ immigrants or purchase immigrant-
provided services. A low-skill immigrant influx would likely harm low-
skill native workers, further increasing the economic and social 
problems associated with rising wage inequality.
    The case that can be made for preferring one type of immigrant to 
another will ultimately depend on what one assumes about the country's 
policy objectives. More specifically, what should the United States 
seek to accomplish from immigration? As I have stressed repeatedly in 
my work, different policy goals will inevitably lead to different 
decisions about the composition of the immigrant population. For 
example, if immigration policy should strive to relieve the tax burden 
on native-born taxpayers, it would be fiscally irresponsible to admit 
millions of low-skill immigrants who have a high propensity for 
participating in public assistance programs. In contrast, if the goal 
were to help the poor of the world by giving many of them an 
opportunity to live and work in the United States, the increased cost 
of maintaining the welfare State is the price that Americans are 
willing to pay for their generosity.
    The case for skilled immigration is based on one particular 
assumption about the policy goal. In particular, suppose that 
immigration policy should seek to improve the economic well-being of 
the population currently residing in the United States (which, for 
simplicity, I will refer to as ``natives'').
    One could obviously argue over whether this policy goal accurately 
represents what Americans should want to accomplish from immigration. 
Nevertheless, the economic well-being of the native-born population has 
played and continues to play a very influential role in determining the 
shape and direction of immigration policy.
    Suppose then that the goal of immigration policy were to maximize 
the economic well-being of the native population. And suppose that 
native economic well-being depends both on per-capita income and on the 
distribution of income in the native population. In particular, the 
country wants to pursue an immigration policy that makes natives 
wealthier, but that does not increase the income disparity among 
workers already in the country. What type of immigration policy should 
the United States then pursue? More specifically, which types of 
immigrants should the country admit, high-skill or low-skill workers?
    A strong case can be made that the economic well-being of natives 
would improve most if the country adopted an immigration policy that 
favored the entry of high-skill workers. The argument in favor of this 
policy contains three distinct parts. Consider first how the fiscal 
impact of immigration affects the native population. High-skill 
immigrants earn more, pay higher taxes, and require fewer social 
services than low-skill immigrants. Put simply, high-skill immigration 
increases the after-tax income of natives, while the tax burden imposed 
by the immigration of low-skill workers probably reduces the net wealth 
of native taxpayers. From a fiscal perspective, therefore, there is 
little doubt that high-skill immigration is a good investment, 
particularly when compared to the immigration of low-skill workers.
    The second part of the case for skilled immigration relies on how 
immigrants alter the productivity of the native workforce and of 
native-owned firms. Although there is a lot of disagreement among many 
economists about the magnitude of the costs and benefits of current 
immigration policy (which is predominantly composed of low-skill 
workers), there is much less disagreement with the proposition that the 
net gain from immigration would increase, and perhaps increase 
substantially, if the immigrant influx were more skilled. For example, 
some of the tabulations that I conducted in Heaven's Door (Princeton 
University Press, 1999) indicated that the net annual income accruing 
to the native population could increase four-fold (from about $10 
billion to $40 billion in the short run) if the immigrant influx were 
to change from 30 percent high-skill to 100 percent high-skill. The 
reason for the additional gains is that the productive infrastructure 
of the U.S. economy--what economists call the ``capital stock''--is 
more complementary with high-skill than with low-skill workers. Hence 
native-owned resources would be more productive (and profitable) with a 
high-skill immigrant influx.
    Finally, skilled immigration has more favorable distributional 
effects. The skilled workers who already reside in the United States 
will face more job competition and lower wages. As a result, there will 
be less, rather than more, wage inequality.
    How can the United States select skilled workers from the pool of 
visa applicants? In the past few decades, Australia, Canada, and New 
Zealand have all instituted point systems that reward certain 
socioeconomic traits in the admissions formula. In Canada, for example, 
visa applicants are graded in terms of their age, educational 
attainment, work experience, English or French language proficiency, 
and occupation. Those applicants who score enough points qualify for 
entry into Canada, while those who fail the test are denied entry.
    Needless to say, any point system is inherently arbitrary. It is 
unclear, however, that the Canadian point system--with its detailed 
gradations for different types of jobs and different types of workers--
is any more arbitrary than the one currently used by the United States, 
where entry, for the most part, is determined by the answer to a single 
question: does the applicant have relatives already residing in the 
United States?
    It is worth emphasizing that the notion that the United States 
would benefit more from a high-skill immigrant influx does not imply 
that the United States should adopt an open-door policy when it comes 
to admitting skilled workers. Even though there is a good economic case 
in favor of high-skill immigration, the available studies provide few 
guidelines for choosing the ``right'' number of high-skill immigrants.
    A sensible way of posing the ``numbers question'' is to imagine a 
counterfactual: what would be the nature of the immigration debate if 
the immigrant flow were composed of 1 million highly skilled workers? I 
believe the United States would still be in the midst of a debate, and 
perhaps an even more heated debate. After all, this type of immigration 
would have substantial distributional consequences on some well-
organized, highly educated, and highly vocal constituencies. The 
political reactions of some professional groups--such as engineers, 
computer programmers, and mathematicians--to the economic impact of 
increased immigration in their fields stress precisely these 
distributional impacts (immigration lowers wages!).
    A flow of 1 million high-skill workers per year would probably have 
a very large impact on the earnings of high-skill workers already in 
the country. To get a rough sense of the magnitude, suppose the United 
States enacted an immigration policy that admitted 1 million college 
graduates, and that this policy was in effect for two decades. By the 
year 2025 or so, roughly 15 million high-skill workers would have been 
added to the workforce (assuming that 75 percent of the high-skill 
immigrants were working at that time). There were approximately 32 
million college graduates employed in the United States in 2004. 
Immigration would effectively increase the supply of college graduates 
by around 50 percent. The available evidence suggests that a 10 percent 
increase in labor supply may reduce the wage of competing native 
workers by 3 percent. A 50 percent increase in skilled labor supply 
would then reduce the wage of college graduates by 15 percent!
    This reduction in the returns to a college education would probably 
influence the college enrollment decisions of many native students. 
After all, going to college is expensive, both in terms of tuition and 
in terms of the potential earnings that students forego while in 
school. If a particular social policy were to reduce the returns to 
such an investment by 15 percent, many students would probably respond 
by deciding not to get a college education at all. Moreover, 
disadvantaged native students may well be more sensitive to the decline 
in the returns to college, and their enrollment rates could easily drop 
the most. These are the students, after all, who can least afford to 
attend college and who would quickly discover that the shrinking 
returns to a college education do not justify the cost.
    There is, therefore, some limit to how much immigration should 
narrow income inequality. Put bluntly, the potential for millions 
(perhaps even tens of millions) of high-skill workers to enter from 
such countries as China and India should indicate to any prudent 
observer that some limitations on the number of skilled workers that 
enter the country is required.
    Let me conclude by reemphasizing that the economic case for high-
skill immigration versus family reunification hinges entirely on an 
assumption about the country's policy objectives. High-skill 
immigration is the best policy if the United States wishes to maximize 
the economic well-being of the native population. This assumption 
obviously ignores the impact of immigration on many other 
constituencies, such as on the immigrants themselves (who would clearly 
prefer to be reunited with their families) and on the vast population 
that remains in the source countries. The United States, for instance, 
might choose to drain the labor markets of many source countries from 
particular types of skills and abilities (such as high-tech workers). 
Such a brain drain would probably have a detrimental effect on economic 
growth in those countries.
    In short, there are difficult tradeoffs. Pursuing a particular 
immigration policy might help some groups, such as native workers, but 
may hurt others. As a result, the adoption and implementation of any 
specific immigration policy will leave winners and losers in its wake. 
In the end, the goals of immigration policy must inevitably reflect a 
political consensus that inevitably incorporates the conflicting social 
and economic interests of various demographic, socioeconomic, and 
ethnic groups, as well as political and humanitarian concerns.
    (Professor Borjas is the Robert W. Scrivner Professor of Economics 
and Social Policy at the John F. Kennedy School of Government, Harvard 
University; and a Research Associate at the National Bureau of Economic 

    Senator Sessions. That's a good economic principle.
    Mr. Borjas. Yes.
    Senator Sessions. I think Mr. Massey would agree that there 
is no free lunch. Great to have you, sir.

                      PRINCETON UNIVERSITY

    Mr. Massey. Thank you. There is nothing wrong with creating 
an immigration policy that takes into account the skills, 
education and abilities of people. In fact, the United States 
has such a system. Around 20 percent of immigrants currently 
enter on visas reserved for workers with these characteristics. 
Given that the United States is the world's largest economy and 
has an unparalleled infrastructure for investment, research and 
innovation, it generally does quite well in the global 
competition for human capital. In order to compete with the 
United States, smaller countries have created visa allocation 
systems that give relatively greater weight to education, 
skills and abilities. In recent years, 40 percent of 
Australia's immigrants arrived in skilled or professional 
categories, as we've heard today, and an even larger share of 
Canada's arrive in these categories. A skill-based system gives 
these countries some hope of competing with the colossus in the 
world economy that is the United States.
    I would not advocate a similar heavy emphasis on skilled 
immigration in the United States for several reasons. First, we 
don't really need such a system because the United States 
already does very well in the global market for skilled labor. 
In my own department in Princeton, 30 percent of my faculty are 
foreign born. To the extent that the United States has problems 
in human capital formation, then cherry-picking talent from 
around the world is only a stop-gap measure that doesn't solve 
the problem. In the long run, the primary source of America's 
skills, talents and education must come from investments in its 
people by funding education, training and research at home. We 
spend just 3.8 percent of GDP on primary and secondary 
education, well behind our competitors in the developed world.
    Not only is immigration a poor substitute for basic 
investments in education and training, it is less reliable as a 
source of human capital. Immigrants are, by definition, mobile 
and they can depart as easily as they arrive. Within Australia, 
for example, in any given year, the arrival of immigrants is 
offset by a 25 percent rate of immigration among former 
arrivals. Of those who depart, 56 percent are professionals. A 
recent analysis I did of newly arrived immigrants in the United 
States found that dissatisfaction with life in the United 
States goes up sharply as education rises and the more 
dissatisfied immigrants are, the less likely they are to want 
to naturalize and the more likely they are to leave the 
    Admitting immigrants simply because they possess skills can 
also create problems. Although Canada admits a lot of 
immigrants in the skilled categories, it is not an unmitigated 
model of success. Unsuccessful integration by skilled 
immigrants is increasingly common and is now recognized as a 
serious policy concern. The principle reason for failed 
integration is the inability of immigrants to find meaningful 
employment in their profession. As a result of the gap between 
the number of skilled immigrants arriving in Canada and the 
ability of the country to absorb them, immigrants there have an 
exceedingly high rate of poverty. According to Statistics 
Canada, some 36 percent of immigrants who arrived in the past 5 
years earn poverty-level wages, a percentage that rises to 51 
percent among immigrants from South Asia. The dashed hopes 
helps to explain the growing resentment and political 
attraction to radical Islam in some of Canada's Muslim 
populations. By way of comparison, the rate of poverty among 
immigrants in the United States is just 18 percent, compared 
with 11 percent among natives.
    Not only does a skill-based immigration policy suffer as a 
human capital development strategy, it doesn't make sense by 
itself, as an immigration policy either. Immigration policies 
must balance many competing issues, one of which is skills 
needed for the economy. Although Australia emphasizes skills in 
admitting immigrants, it still retains special provisions for 
immigrants from neighboring countries and allocates around 30 
percent of its visas to family members and around 10 percent to 
humanitarian arrivals.
    In neither Australia nor Canada has the emphasis on skills 
and education been sufficient to deal with labor demand in 
unskilled categories. Canada still, at this point, is importing 
around 90,000 temporary workers per year in mostly unskilled 
work. At the same time, the nation is estimated to house an 
illegal population in the neighborhood of 200,000 people. In my 
view, provisions that favor the entry of skilled and educated 
workers constitute a valuable component of a balanced 
immigration policy. But care must be taken not to over-sell 
their virtues.
    Skilled immigration is not a substitute for national 
investment in human capital nor does it always provide a 
costless pathway to economic growth. A skill-based policy, by 
itself, cannot accomplish everything an immigration policy 
needs to do. For an addition to needs for skilled and educated 
workers or needs for family reunification and humanitarian 
relief, not to mention the need to accommodate population 
movements stemming from broader processes of regional 
integration, a fact that is clearly evident in North America. 
Thank you.
    [The prepared statement of Mr. Massey follows:]
                Prepared Statement of Douglas S. Massey
    There is nothing wrong with creating an immigration system that 
takes into account and rewards the human capital characteristics of 
immigrants. After all, as markets for goods, services, products, 
information, and financial capital have globalized, so have markets for 
human capital. Human capital refers to the skills, knowledge, and 
abilities gained by people as a result of education and experience, 
both formal and informal.
    Indeed, the United States has such a system. The United States 
currently reserves around 40 percent of its numerically limited visas 
for workers judged to be priority in the Nation's economy; those with 
professional credentials, needed skills, or special talents; and those 
whose presence is deemed likely to create American jobs. However, the 
share of employment-based migrants actually runs at around 20 percent 
of total immigration because the United States does not attempt to 
limit the entry of spouses, children, and parents of American citizens 
who, by themselves, constitute something over 40 percent of the total.
    Given the large size of the U.S. immigration system, even a total 
percentage of around 20 percent means that we take in 150,000 to 
200,000 skilled workers each year as permanent residents, and the 
United States generally does quite well in attracting human capital 
away from its competitors in the OECD. After all, it is the world's 
largest and most dynamic economy and it has an unparalleled 
infrastructure for investment, research, and innovation. It is no 
wonder that we attract the lion's share of the world's skilled 
    In order to compete with the United States, smaller countries such 
as Australia and Canada have created visa allocation systems that give 
relatively greater weight to education, skills, and abilities than to 
family connections in the allocation of immigrant visas. In recent 
years, close to 40 percent of Australia's immigrants arrived in skilled 
or professional categories, compared to around 55 percent of Canada's. 
A skill-focused immigration system gives these countries some hope of 
competing with the colossus in the world economy that is the United 
    I would not advocate a similar emphasis on skilled immigration in 
the United States, for several reasons. First and foremost--we don't 
really need to. As already mentioned, the United States does very well 
in the global market for human capital. In my home department at 
Princeton University, for example, 30 percent of the faculty is foreign 
born, more than double the rate in the Nation as a whole. Moreover, the 
Bureau of Labor Statistics does not foresee any dire shortages of 
skilled and educated workers looming in the foreseeable. Over the next 
decade, the largest single category for job growth, at 33 percent, will 
be health care service workers, an unskilled category that will become 
increasingly important as the U.S. population ages. Although demand for 
computer scientists, programmers, and mathematicians is also expected 
to increase by 30 percent, in absolute terms the demand for health 
service workers will be greater; and given the shift toward outsourcing 
in high-tech fields, there are few complaints about shortages of 
programmers and engineers. More common are complaints about the number 
of jobs being shipped overseas than the number of immigrants arriving 
to fill them here.
    Moreover, to the extent that the United States has problems in 
human capital formation--that is, the inculcation of skills and 
education among its citizens--cherry picking talent from abroad is a 
stopgap measure that doesn't solve the problem. In the long run, the 
primary source of America's stock of skills, talents, and education 
must come from investments made in its own human capital--by funding 
the acquisition of education and training and the promotion of basic 
and applied research at home. According to data from the National 
Center for Educational Statistics, we spend only 3.8 percent of our GDP 
on primary and secondary education, including both public and private 
institutions, a level of educational funding that is well behind 
competitors as Australia, Belgium, Denmark, France, Korea, New Zealand, 
Norway, Portugal, Sweden, and Switzerland.
    Not only is immigration a poor substitute for investments in the 
education and training of Americans, it is much less reliable as a 
source of human capital. Immigrants are, by definition, mobile, and 
they can depart as easily as they arrive. Within Australia, for 
example, in any given year, the arrival of immigrants is offset by a 25 
percent rate of emigration by former immigrants; and of those who 
depart a very disproportionate share, around 56 percent are 
professionals. Indeed, in a recent analysis I did of newly arrived 
immigrants to the United States, I found that relatively high levels of 
dissatisfaction with life in the United States went up sharply as 
education rose. Whereas one-third of all immigrants said they were 
somewhat or very dissatisfied with the life in United States after 1 
year in the country, the figure rose to more than two-thirds among 
immigrants with advanced degrees. Those with the highest earnings were 
least likely to want to naturalize to American citizenship.
    In many ways, immigration is more difficult for those with 
education, professional skills, and credentials. Admitting immigrants 
simply because they possess skills without regard for whether and how 
those skills might be used in the receiving countries can create more 
problems than it solves. Although Canada admits more skilled immigrants 
as a percentage of its total than any other country, it is hardly a 
model of success. Unsuccessful integration by skilled immigrants is 
common and is now recognized as a serious policy concern; and the 
principal reason for failed integration is the inability of a household 
breadwinner to gain meaningful employment in his or her chosen 
profession or trade.
    As a result of the gap between the number of skilled immigrants 
arriving in Canada and the ability of the country to absorb them, 
immigrants there have an exceedingly high rate of poverty. According to 
data from Statistics Canada, 36 percent of immigrants who arrived in 
the prior 5 years earn poverty level wages, a percentage that rises to 
45 percent among migrants from East Asia and 51 percent among 
immigrants from South Asia. The high rate of poverty and the dashed 
hopes that it implies help to explain growing resentment and rising 
attraction to radical Islam in Canada's Muslim community. In Canada, 41 
percent of the children of immigrants live in poverty, compared with 18 
percent of native children. By way of comparison, the rate of poverty 
among immigrants in the United States is just 18 percent, compared with 
11 percent among natives.
    Not only does a policy weighted disproportionately toward the 
skilled and educated not suffice as human capital development policy, 
it doesn't make sense as immigration policy. Immigration policies 
balance many competing issues, only one of which is skills and 
education for input into the economy. Although nations such as 
Australia may emphasize skills to compete with the United States, that 
country still retains special provisions for entry from neighboring 
nations such as New Zealand and it continues to admit 28 percent of 
immigrants in family categories and 10 percent in humanitarian 
categories. Even in Canada, 25 percent of immigrants enter as family 
members, 11 percent as refugees, and 9 percent in other categories.
    In neither of these countries, moreover, has the emphasis on skills 
and education in the system of legal admission been sufficient to deal 
with labor demand in less skilled categories. Canada, for example, 
imports some 90,000 temporary workers each in largely unskilled 
categories such as agricultural laborers and private household workers, 
and the nation currently houses an illegal population estimated to be 
in the neighborhood of 200,000. Australia's undocumented population is 
estimated to be on the order of 50,000. Although these numbers may seem 
small by American standards, they pertain to much smaller countries.
    In summary, provisions that favor the entry of skilled and educated 
workers constitute a valuable component of a balanced immigration 
policy, but care must be taken not to over-sell their virtues. Skilled 
immigration is not a substitute for national investment in human 
capital through education, training, and research, nor does the simple 
importation of more skilled and educated workers provide an easy 
pathway to national development, as Canada's experience increasingly 
shows. Finally, a skills-based policy cannot by itself accomplish 
everything an immigration policy needs to do, as even Australia and 
Canada have realized. In addition to needs for skilled and educated 
workers are needs for family reunification and humanitarian relief, not 
to mention the need to accommodate population movements stemming from 
broader processes of regional economic integration, a fact nowhere more 
obvious than within the zone covered by the North American Free Trade 

    Senator Sessions. Thank you, Mr. Massey. Mr. Tonelson, 
we're glad to have you.


    Mr. Tonelson. Thank you very much, Senator Sessions and I 
am very grateful for the opportunity to testify today on behalf 
of the U.S. Business and Industry Council and its 1,500 member 
companies on skills-based point systems.
    Since 1933, USDIC has been representing family-owned 
companies, mainly small- and medium-sized manufacturers and it 
is one business organization that is deeply concerned about the 
deterioration of U.S. immigration policies for the past 20 
years and of special relevance to our hearing today, we are 
very worried about the overwhelming economic irrationality of 
current U.S. immigration policy. Frankly, we feel that 
strengthening the American economy in ways that lift incomes 
for native born Americans should be the top priority of U.S. 
immigration policy.
    Now, there is no doubt that skilled-based point systems or 
approaches like them, in principle, can help restore much of 
that needed rationality to American immigration policy and yet, 
such mechanisms need to be constructed and used with great 
care. In particular, labor markets are highly dynamic and even 
volatile systems and the stream of data that they emit does not 
necessarily reveal the most important trends and developments 
that shape these markets over the long-term. As a result, this 
constant stream of data, of short-term data in particular, is 
all too capable of sending public policy down very counter-
productive tracks, leading to efforts to second-guess economic 
and business dynamics best worked often, in fact most often, 
best left to work themselves out. Still, the broad goal of 
somehow linking immigration policy to our economy's major 
economic needs makes a great deal of sense. And again, these 
various point systems represent serious efforts to turn this 
insight into public policy.
    At the same time, we do need to think long and hard before 
adopting systems like this and we should pay special attention 
to the pitfalls of trying to fine-tune labor markets. What are 
some of these? Well, first, in a genuine market-dominated 
economy--and ours certainly qualifies, the very idea of a 
chronic labor shortage, much less a chronic labor shortage that 
the government should try to somehow mitigate, is deeply 
controversial and it should be viewed very skeptically, not 
only by economic theorists but by policymakers. After all, if 
we really do believe in free markets, we therefore believe that 
the supply of anything, including human sweat and human talent, 
is a function of the price offered to that labor. The converse 
is obviously also true. So a mismatch between labor supply and 
labor demand must not automatically be interpreted as a 
problematic shortage, especially in the real world, which is 
what we're all trying to work with, after all, even the most 
efficient markets will often take some time to adjust fully to 
changing conditions. There are always lags and there always 
will be lags.
    Thus, what is often called a labor shortage nowadays is 
often simply an instance of the businesses failing to pay wages 
high enough to attract the workers they say they need. Why 
should government address this particular situation through 
immigration policy at all? Moreover, longer lasting labor 
shortages, in theory and also historically, have been 
precursors to highly desirable economic change. One example--
our country has always been a labor-short country relatively 
speaking. That is, of course, the main reason why for much of 
U.S.'s history, we have been relatively open to immigrants. Yet 
the enduring scarcity of labor has also produced major 
advantages and specifically, it has helped to generate a great 
deal of technological progress and productivity gains. An 
economic theory provides a very convincing explanation why. 
When businesses determine that the price of scarce labor has 
become excessive, powerful incentives emerge to substitute 
capital and technology for labor. That means innovation.
    Preventing labor shortages in, for example, high-tech 
industries but throughout the American economy, carries a great 
risk of weakening this proven spur to technological progress. I 
don't think we want to do that. Sectors of the American economy 
claiming or actually experiencing genuine labor shortages may 
be sending yet another market signal that we should not ignore, 
that their businesses or sectors are simply not viable. Many of 
the loudest and most persistent claims of labor shortages and 
of the need, frankly, for eased control on immigration, come 
from, for example, the service sector of the American economy, 
especially industries like hospitality, entertainment, cleaning 
services and building management. These industries also argue 
that they can't raise wages easily because their margins are 
often very slim and often, they have a very good point. They 
would also argue with some justification that they can't easily 
mechanize or digitize. Yet assisting them with greater 
immigration inflows could overlook and worse, reward, a failure 
to innovate managerially and to increase efficiency and 
productivity, for example, by re-organizing their physical 
operating arrangements or simplifying administration procedures 
or simply motivating their workers more effectively through 
nonwage incentives. In other words, companies or entire sectors 
that are heavily dependent on rock-bottom wages for 
profitability and even survival may not be sectors or companies 
that deserve to survive. Their confessed inability to make 
money by raising prices at all constitutes powerful evidence 
that their product or service is simply not wanted very much. 
Why should governments seek to overturn the market's verdict in 
those instances? So we eat out less or we wind up paying more 
for meals at restaurants? What's the problem? Let's trust the 
market to adjust constructively in the long-term to situations 
like this.
    A third reason to be careful about using immigration policy 
to stabilize labor markets stems from the inherent complexity 
of the signals provided by wage and broader compensation 
levels. The most important complexity is that although stagnant 
or declining compensation almost always represents conclusive 
evidence of a labor surplus, rising compensation is not always 
conclusive evidence of a short- or long-term labor shortage, 
especially one that can or should be remedied through 
immigration policy because rising compensation can often 
reflect circumstances having nothing to do with longer term 
economic fundamentals. For example, very strong backing for the 
proposition about falling wages comes from recent trends in 
sectors of the American economy that we know use illegal 
immigrant workers especially heavily. The National Restaurant 
Association, for example, recently told the press that their 
sector will need nearly 2 million workers in the near future 
but, ``doesn't know where they will come from.'' Yet data from 
the U.S. Bureau of Labor Statistics shows, unmistakably, that 
adjusted wages for the broad food services and drinking 
establishments category fell 1.65 percent between 2000 and 
2005. The hotel industry makes very similar claims and yet, 
according to BLS data, real wages in that sector fell by nearly 
1 percent between 2000 and 2005. Even in the U.S. construction 
industry, which has been servicing recently, the greatest 
housing and real estate boom in human history--nothing less--
inflation-adjusted wages fell 1.59 percent between 2000 and 
2005 and similar figures can be found for every other industry 
that heavily used illegal immigrant labor.
    If employers in sectors like this are genuinely clamoring 
and competing for more workers and are desperate for them and 
don't know where in the world they will actually get them, how 
could real wages fall? How could these businesses possibly hope 
to attract the workers they need by making the jobs that they 
are struggling to fill less attractive? How could that be?
    Now, at the same time, I said wage increases don't 
necessarily signal labor shortages. How could that be? Well, 
one key reason is, long-term labor contracts and especially 
union contracts, can provide for compensation increases even 
when companies run into trouble and ones who actually reduce 
labor costs. Rising compensation can also stem from mistakes in 
managing other areas of U.S. public policy. For example, the 
U.S. news media is filled with articles about alleged shortages 
of skilled manufacturing workers but why would opening doors to 
large numbers of immigrant workers be the very best answer for 
the long-term interests of the U.S. economy or of native-born 
workers, which once again, they should be the main priority of 
U.S. immigration policy.
    Senator Sessions. Mr. Tonelson, if you could wrap up, we'll 
make your full remarks a part of the record. I find them very 
    Mr. Tonelson. I'm sorry for that. I would stress in closing 
that no attempt to restore rationality to U.S. immigration 
policy can possibly work without enforcement, without effective 
monitoring and effective enforcement and that means real money 
and real personnel and it means time to put these entirely new 
systems into effect. And I'll close with that.
    [The prepared statement of Mr. Tonelson follows:]
                  Prepared Statement of Alan Tonelson
    Good morning, Mr. Chairman, Mr. Ranking Minority Member, and 
members of the committee. I am very grateful for the opportunity to 
testify today on behalf of the U.S. Business and Industry Council and 
its 1,500 member companies on using a skills-based point system to help 
implement an employment-based immigration policy.
    USBIC, which since 1933 has been representing family-owned 
companies--mainly small and medium-sized manufacturers--has been deeply 
concerned about U.S. immigration policy for the last two decades. We 
have watched with dismay how U.S. policy during this period has 
regressed into a de facto Open Borders stance that is endangering our 
national security and undermining wages and benefits throughout the 
labor force.
    Shifting America's immigration policy from one focusing tightly on 
family unification to one focused on serving the Nation's long-term 
economic interests in principle would be a most welcome step. Skills-
based point systems like those used in countries such as Canada and 
Australia have the potential to help achieve this objective.
    At the same time, such mechanisms need to be constructed and used 
with great care. In particular, labor markets are highly dynamic--even 
volatile--systems. The stream of data that they constantly emit does 
not necessarily reveal the most important trends and developments that 
shape these markets over the long run. In fact, the endless barrage of 
short-term numbers can conceal or obscure these more enduring 
underlying trends. As a result, they are all too capable of sending 
public policy down counterproductive tracks. And they could easily 
place policymakers in the risky position of trying to second-guess 
economic and business dynamics best left to work themselves out. That 
is to say, the short-term employment figures should not be confused 
with reliable data about genuine economic fundamentals.
    The broad goal of somehow linking immigration policy to the 
economy's major needs makes good sense. The advantages of awarding 
preferences of some kind to immigration applicants likely to be 
productive and innovative instead of applicants likely to be economic 
dead weights (at least for the foreseeable future) should be obvious. 
In addition, immigration policy should try to take the economy's 
performance into account as well. If the entire economy is booming on a 
sustainable basis, relatively higher inflows would seem advisable. If 
the economy is mired in a lengthy downturn, reducing immigration levels 
arguably would preserve more jobs for citizens who are workers--the 
worker group deserving of first priority in U.S. immigration policy--
and for non-citizens residing in the United States legally.
    Governments can also reasonably hope to gear immigration policy 
toward long-term trends affecting more specific sectors of the economy. 
An immigration policy favoring manual typewriter repairers clearly 
deserves less support than one favoring computer network architects. 
The point systems in place in Canada, Australia, and New Zealand 
represent serious efforts to turn these insights into policy. Although 
Canada's point system assigns less weight to its economy's specific 
occupational needs, it still attempts to match newcomers with 
particular industries. In its skilled worker program, it places a 
premium on highly specialized skills ranging from butcher to welder to 
Ph.D. mathematician, and even assigns these different skills varying 
weights. Australia goes so far as to publish an ``Occupations in 
Demand'' list every 6 months that is based on comprehensive labor 
market research, including consultations with individual employers and 
business groups. New Zealand awards bonuses for applicants in sectors 
identified as ``growth areas,'' ``future growth areas,'' or areas of 
``absolute skills shortage.''
    U.S. policymakers, however, should think long and hard before 
turning such programs into the core of a new U.S. immigration policy. 
They should pay special attention to the pitfalls of trying to fine 
tune labor markets.
    First, in a genuine market-dominated economy, the very idea of a 
chronic labor shortage--much less a chronic shortage that the 
government should try to mitigate--is deeply controversial. It should 
be viewed skeptically not only by theorists, but by policymakers. After 
all, if we believe in free markets, we believe that the supply of 
anything--including human labor and talent--is a function of the price 
offered to that labor. The converse is true as well. So a mismatch 
between labor supply and labor demand must not automatically be 
interpreted as a problematic shortage--especially since in the real 
world, even the most efficient markets will often take some time to 
adjust fully to changing conditions.
    Thus, what is characterized as a labor shortage nowadays is often 
simply an instance of employers failing to pay wages high enough to 
attract the workers they say they need. Why should government address 
this situation through immigration policy at all?
    Indeed, this uncertainty reflects the second reason to be careful 
about fine-tuning labor markets. Longer-lasting labor shortages in 
theory and historically have been precursors to highly desirable 
economic change.
    For example, the United States has always been a labor-short 
country. That's of course a main reason we have been so open to 
immigration for so much of our history. Yet the enduring scarcity of 
labor also has produced major advantages for our country. Specifically, 
it has generated much of the technological progress and many of the 
productivity gains we have achieved.
    Economic theory provides a very convincing explanation why. When 
businesses conclude that the price of scarce labor has become 
excessive, powerful incentives emerge for them to substitute capital 
and technology for labor. And that means innovation. Our country owes 
much of its longstanding world leadership in most technology areas to 
this genuinely chronic scarcity and thus relatively high price of 
labor. Preventing shortages with immigration policy could weaken this 
proven spur to technological progress and all the benefits it brings.
    Sectors of the economy claiming or actually experiencing genuine 
labor shortages may be sending another market signal that we ignore at 
our peril--that their businesses are not viable, and thus don't deserve 
to survive, at least not in their present form. Many of the loudest, 
most persistent claims of labor shortages--and of the need for eased 
immigration controls--come from the service sector of the American 
economy, especially industries such as hospitality, entertainment, 
cleaning services, and building management. These industries also argue 
that they can't raise wages easily because their margins typically are 
so slim. Often they have a point. They also argue, with some 
justification, that they cannot easily automate or mechanize or 
    Yet assisting them with greater immigration flows could amount to 
overlooking vitally important economic realities. It could overlook--
and reward--a failure to innovate managerially, to increase efficiency 
and productivity by reorganizing physical operating arrangements, or 
simplifying administrative procedures, or simply motivating employees 
more effectively through non-wage incentives.
    In other words, companies--or entire sectors of the economy--
heavily dependent on rock-bottom wages for their profitability and even 
survival may not be companies or sectors deserving to survive. Their 
confessed inability to make money by raising prices constitutes 
powerful evidence that their product or service simply is not in great 
demand. Why should government seek to overturn the market's verdict in 
such instances?
    A third reason to be careful about using immigration policy to 
stabilize labor markets stems from the inherent complexity of the 
signals provided by wage and broader compensation levels. Compensation 
is of course powerfully influenced by the supply of labor in a given 
market at a given time, but the relationship is hardly mechanical. The 
most important complexity is that, although stagnant or declining 
compensation almost always represent conclusive evidence of a labor 
surplus, rising compensation is not always similarly conclusive 
evidence of a short- or long-term labor shortage--especially one that 
can or should be remedied through immigration. For rising compensation 
can often reflect circumstances having nothing to do with economic 
    Support for the proposition about falling wages comes from recent 
trends in sectors of the economy that use illegal immigrant labor 
heavily. The National Restaurant Association, for example, recently 
told the press that this industry will need nearly 2 million workers in 
the near future but ``doesn't know where they will come from.'' Yet 
data from the U.S. Bureau of Labor Statistics shows that inflation-
adjusted wages for the broad Food Services and Drinking Establishments 
industry fell 1.65 percent between 2000 and 2005.
    The hotel industry has made similar claims. Yet according to BLS 
data, real-wages in this sector fell by nearly 1 percent from 2000 to 
2005. Even in the construction industry, which in recent years has been 
servicing the great housing and real estate boom in world history, 
inflation-adjusted wages fell 1.59 percent between 2000 and 2005. 
Similar figures can be found for other illegal immigrant-heavy service 
sectors, such as dry cleaning and laundry services, parking facilities, 
golf courses and country clubs, as well as food manufacturing.
    If employers in these sectors have truly been clamoring and 
competing for more workers, how could real wages have fallen? How could 
employers have hoped to attract the workers they need by making the 
jobs they are struggling to fill less attractive? But more than simple 
common sense points to the existence of labor gluts in these sectors 
during this period. Wages in most illegal immigrant-heavy sectors of 
the economy followed a common pattern in the first 5 years of this 
decade. Until about 2002 or 2003, real wages in these industries 
actually tended to rise a bit. Yet soon after, they dropped 
significantly. Obviously, employers in these sectors decided that their 
labor costs had grown excessive, and in response stepped up efforts to 
bring Mexican and Central American labor markets and standards into the 
United States.
    Why, however, don't wage increases similarly signal labor 
shortages. One key reason: Long-term labor contracts, and especially 
union contracts, can provide for pay and benefits increases even when 
companies run into trouble, and may well want to cut labor costs. These 
contracts can also set floors that for political reasons can be 
exceedingly difficult to breach. Rising compensation can also stem from 
errors in managing other areas of public policy.
    For example, the media is filled with articles about alleged 
shortages of skilled manufacturing workers. A case in point is an 
August 15 Wall Street Journal article about the scarcity of welders. 
For two decades, the Journal reported, ``welding, a dirty and dangerous 
job, has fallen out of favor'' in the United States. Yet with 
industrial production recovering several years ago and remaining 
strong, wages and benefits are skyrocketing, and manufacturers now 
ostensibly are at their wit's end. Nor, apparently, is outsourcing the 
work to low-wage countries like China the answer in every situation--
    But would opening the doors to large numbers of immigrant welders 
be the best answer for the long-term interests of the U.S. economy, or 
of native-born workers? That seems unlikely, since a major root cause 
of the shortage arguably would remain unaddressed. It is entirely 
possible that the welder and broader skilled manufacturing worker 
shortages stem not from the ``dirty and dangerous'' nature of the work, 
but from the steep decline in manufacturing employment--and future 
employment opportunities--and still-depressed output levels in many 
non-electrical machinery industries in particular that have 
characterized the U.S. economy recently.
    Wittingly or not, American policymakers have sent the native-born 
labor force a clear message: that maintaining manufacturing employment 
opportunities is simply not valued in Washington. With no evidence that 
this official indifference to manufacturing employment will change 
anytime soon, why would any prospective welder in his right mind 
actually have started down such a career path in the last decade or 
two? Who could blame young Americans for shunning such occupations? 
From the standpoint of promoting the creation of high-wage job 
opportunities for native-born Americans--which, again, must be the U.S. 
government's top immigration and labor policy priority--the best 
solutions to this labor shortage would be measures to create confidence 
that manufacturing production employment in America has a solid long-
term future. This means major adjustments in various regulatory and tax 
policies, and in our international trade policies.
    The final reason to be cautious about implementing Canadian- or 
Australian-style point systems concerns problems that could result from 
the focus on skilled workers. As suggested earlier, an immigration 
policy placing a premium on highly skilled and educated immigration 
applicants can in principal create significant benefits for the 
American economy. Nonetheless, the risks that exist in principal--and 
that show signs of real-world effects--must not be overlooked.
    As is well known, the United States has had something like such a 
policy in place in the form of its various visa programs designed for 
employers needing special skills ostensibly not available in sufficient 
amounts in the native-born labor force. In sectors such as information 
technology services, however, an impressive body of evidence shows that 
the ease with which these programs can be implemented poorly, and their 
enforcement requirements neglected, is depressing wages in these 
knowledge-intensive areas.
    Turning high-wage jobs into much lower-wage jobs may serve the 
short-term interests of U.S.-owned and located technology companies. 
But this growing trend is having dangerous consequences for the 
foundations of America's technology leadership. For it looks to be 
discouraging many of the best and brightest young Americans from 
pursuing science and technology careers. The education and skill 
premiums previously enjoyed by such workers are shrinking steadily. 
Given the long and often expensive years of schooling generally 
required to gain world-class information technology expertise, young 
people quite understandably seem to be shying away from degree programs 
in the most relevant academic disciplines. These trends, of course, 
threaten not only our Nation's future pool of the scientists and 
engineers available for private industry. They threaten our future pool 
of potential researchers--those scientists we need to ensure a 
continuing series of breakthrough discoveries.
    Unless one supposes that the native-born pool of potential high 
tech workers can or should be largely replaced by a supply of immigrant 
high tech workers, the possible problems created by a focus on skills 
should become clear.
    Some relatively broad and relatively narrow policy recommendations 
might help Washington maximize the benefits and minimize the risks of 
point systems. In general, the bias in these systems should be toward 
generic education levels and skill endowments, not toward more specific 
occupational experience or qualifications. In this sense, Canada's 
recently revised system points the way, placing more emphasis on 
attributes that will help immigrants adapt readily to the rapid rate of 
contemporary economic change. In the process, this program adds to the 
entire country's economic flexibility.
    Because genuine labor market fundamentals are so difficult to 
identify, responsibility for spotting them and recommending changes in 
immigration policy could be awarded to an independent Federal 
commission containing representatives from the worlds of labor and 
academe as well as business. Still, the commission's charter should 
include a significant bias against efforts to micro-manage labor 
markets. An unmistakable burden of proof should be placed on 
recommendations to intervene.
    Alternatively, if a smaller government role is desired, Washington 
could authorize companies and industries to certify the existence of 
chronic labor shortages easable only through higher immigration flows. 
Yet because employers and their organizations have made so many false 
claims of such shortages in the past, heavy penalties--including 
possibly criminal penalties--should attach for abuses of this system.
    This committee's interest in bringing economic rationality to 
American immigration policy is most encouraging. As the Chairman and 
the committee members continue to examine this option, I hope they will 
stay mindful of both the potential pluses and minuses of different 
reform proposals. I also hope they will not forget that, all else 
equal, it is entirely possible that the most economically rational 
policy will entail the lightest degree of intervention in labor 
markets. Thank you again for your interest in these thoughts. I and the 
U.S. Business and Industry Council look forward to working with the 
committee to improve our immigration policies.

    Senator Sessions. Thank you. Well, I recall the article you 
wrote on what you demonstrated, from the Department of Labor 
statistics, that the areas that did have the greatest amount of 
labor had shown, really a negative wage over the last number of 
years, so it did sort of allow the argument that those 
industries are desperately trying to hire people and they can't 
hire them.
    Mr. Massey talked about the difficulties of integration, 
Mr. Beach that Canada had seen in some of the immigrants who 
had come there. I had discussed that with a Canadian official 
recently and he raised that point as a basis for further 
tweaking of their point system, to get a higher level of 
integration and economic success. Maybe I'd ask you to comment 
on that and also would ask you to express an opinion on who 
integrates best, the more-skilled and educated worker or the 
less-skilled worker?
    Mr. Beach. Thank you very much, Senator. It is quite true, 
the figures that Professor Massey cited. In fact, I have the 
study in which they come from. Now, on the one hand, they may 
convey a bit more negative view than one might think, because 
the figures he was citing for was for immigrants as a whole 
rather than for those who come in under the point system and 
presumably would assimilate faster or just faster----
    Senator Sessions. In other words, that would include people 
that come in without a skill-based set.
    Mr. Beach. That's exactly right, Senator Sessions and in 
general, the latter adjust much more slowly and integrate much 
more slowly than those who do come in under the point system.
    Senator Sessions. That would then sort of settle that 
question, I mean, right there, would it not? That those in 
Canada coming in under the skill-based systems are integrating 
better than those who don't?
    Mr. Beach. Well, certainly it settles that. That evidence 
is quite conclusive but Professor Massey does raise the 
troubling question that while they integrate faster than 
nonindependent immigrants, the fact is, the speed of their 
adjustment or assimilation has been declining over the last 20 
years and also corresponding to that is the rate of the working 
poor who are immigrants, has been rising. It is significantly 
higher than that of the working poor who are not immigrants and 
that is quite worrisome. I could give you----
    Senator Sessions. Now, the policy was changed in 2002. Have 
you been able to ascertain any trends since then and that 
policy, as I understood it--correct me if I'm wrong--was 
designed to create a better assimilation and success of 
    Mr. Beach. Yes.
    Senator Sessions. It was focused on--I think you indicated 
general skills that would allow you to be--increased 
productivity, the move between jobs rather than just a specific 
skill and a specific job.
    Mr. Beach. That's exactly right. And when you have a 
country where people are thinly spread across a long distance, 
having some flexibility to adjust is quite important. We don't 
have evidence yet to be able to answer the question as to what 
the effects are. I view the 2001-2002 changes as essentially 
tweaking or refining the more fundamental changes that were 
brought in during the middle nineties but really shifted from a 
focus on the point system on gap-filling to one that looked at 
these broader range of skills. Because the evidence is 
conclusive that those with a range of broad skills do 
assimilate better.
    Part of the question that you raised and Professor Massey's 
figures refer to, is as I mentioned, the rate of adjustment of 
immigrants, including independent class immigrants, has been 
worsening over the last 20 years and there is quite a question 
as to why that is occurring. Some of the reasons have to do 
with the immigration system or the point system and some are 
other things as well. I don't know if you want a short form or 
a long form. There are a lot of things like that.
    Senator Sessions. Maybe we better let the other panel--if 
you thought there was something you'd like to share with us, if 
you would do that for the record, we would appreciate it.
    Mr. Beach. Or I can certainly do that and also, if there 
are written questions, I can elaborate on that at that time.
    Senator Sessions. On the success rate or assimilation rate, 
Professor Borjas, you've written about it also, I guess. What 
are your thoughts on that general discussion that we've just 
    Mr. Borjas. My study of the Canadian data and my reading of 
the literature seems to indicate pretty clearly that highly 
skilled immigrants in Canada coming in through the point 
system, do a lot better in the end and assimilate faster than 
the immigrants who don't come in through the point system. One 
important thing to notice in terms of the increasing poverty 
among immigrants in Canada is that, note, Canada has a very 
large immigrant influx of high-skilled workers. It is also 
inevitable that that large a number of high-skilled immigrants 
is going to effect the high-skilled labor market. In fact, 
there is recent evidence indicating that the high skill wage in 
Canada has actually declined by 5, 6 percentage points over the 
last 20 years because of that.
    I'm sure that part of the reason that over time, the high-
skilled immigrants coming in to Canada doing slightly worse is 
because they, themselves are being affected by themselves. You 
know, there are just so many of them that the high-skill labor 
market in Canada has really been distorted quite substantially 
over the last two decades.
    Senator Sessions. That's an interesting insight. I think 
about my cotton farmers. They know if there is a big year of 
cotton and there is a lot of cotton on the market, the price 
tends to go down. If there is a shortage, the price tends to go 
up. Mr. Tonelson, would you briefly comment on that and I'll 
let Mr. Massey wrap that--any thoughts he had at the 
    Mr. Tonelson. I would just say that it is worth considering 
that even if high-skilled Canadian immigrants are having more 
and more problems and doing less and less well, that's 
certainly not an argument for putting a premium on skills or on 
knowledge because clearly, low-skilled, low-knowledge people 
will be doing even worse and in fact, if you think about it one 
step further, assuming that like in this Nation, most of the 
low-skilled people go into the service industries, their major 
customers are higher income Canadians. If they are becoming 
lower and lower and if their incomes keep on falling, then the 
demand for those very services will fall also and everyone will 
be worse off then. But certainly, the low-skilled will suffer 
the most.
    Senator Sessions. Mr. Borjas, on that subject. Mr. Tonelson 
has written on it a little bit.
    No, I'll leave that and go to Mr. Massey and let you wrap 
up on this subject because we have a number of others to talk 
    Mr. Massey. The main point that I wanted to make was that 
simply putting in a point system that kind of rewards people 
for having certain skills, abilities and so on, doesn't solve 
all your problems. Sometimes it can create problems. So, kind 
of emphasizing--too much of an emphasis on skills and 
education, the immigration system can also create problems for 
people as Canada is experiencing now. As George points out, 
they've saturated, in some sense, the high end of their labor 
market and pushed down some of the wages. At the same time, the 
process of bringing in and incorporating skilled immigrants 
from other countries has proved more difficult than people had 
expected. There are credentials issues, there are licensing 
issues and then there are also issues of discrimination in the 
labor market that they have to face now.
    Senator Sessions. I'm just a tremendous fan of President 
Bush but he has used the phrase and maybe I'm taking it a 
little out of context, a willing worker and a willing employer, 
and implying essentially that's all that it takes. That's the 
only issue that you need to decide there.
    Well, Dr. Borjas, would you agree, I think, with Mr. 
Tonelson, that that is an invitation to employers to not 
increase wages and could actually pull down the wages of low-
skilled American workers and I think you've written on that.
    Mr. Borjas. If I were an employer, I would basically be 
laughing all the way to the bank after listening to President 
Bush saying that, simply for the following reason. I mean, just 
take it to an extreme. What is to prevent an employer who wants 
to make a lot of money from just lowering the wage of almost 
every job to say, $5.15 an hour, the Federal minimum wage, 
knowing full well that there is a world out there of people who 
are more than willing to come to the United States to work for 
that wage, which is far higher than the opportunity available 
to them in the source countries. So that is just an invitation 
for a huge number of workers coming in working for very low 
wages and the employer will able to basically fill almost every 
job available at that wage.
    Senator Sessions. You'd written a book and the title of it 
is, Heaven's Door. You, yourself, are an immigrant to our 
country and we're glad you brought your talents and skills 
here. Would you share for us what you meant by the words, 
Heaven's Door?
    Mr. Borjas. What I meant by Heaven's Door was that after I 
had written the book--okay, this actually was the last thing I 
wrote about the book, the title. After I had written the book, 
I began to reflect on what this country meant to me. I mean, 
when we came to this country, we basically were kicked out of 
Cuba with nothing and I remember very clearly my family sort of 
dreaming about being able to live in a country where one had 
freedom and opportunity and they wanted me out of Cuba, no 
matter what, even if they couldn't have the freedom and the 
opportunity, they wanted me to have it. And that's really what 
I meant by that. I mean, the country is really like a beacon. 
The old myth is correct. This country, to people abroad--to 
many people abroad is really a beacon of freedom and 
opportunity. We have a great responsibility here to make sure 
that continues to provide that beacon for future generations.
    Senator Sessions. And you, I believe, make reference to the 
fact that from an economic perspective, virtually any third-
world person, of what coming to the United States means for 
them economically, anywhere in the world, virtually.
    Mr. Borjas. In terms of coming to the United States. It 
just means that life of incredible wealth--imagine most places 
in the world. It means a life of a steady job, of not having to 
worry about where your next meal is coming from, in many cases, 
of being able to work a 40-50 hour week, of being able to take 
vacations, of being able to have leisure, being able to--
especially for the children, of being able to make sure that 
even if you don't quite make it in this generation, your 
children will have a pretty good opportunity of ending up quite 
well in their life. So I think that is really the crucial 
beacon of economic and----
    Senator Sessions. And that's the basis for the fact that 
more would seek to come here than you believe would be wise or 
that we could rationally accept.
    Mr. Borjas. Just think about the lottery, okay? I mean, I 
looked at the numbers. I'm teaching a class right now on 
immigration and I looked at the numbers very recently on the 
lottery applications. We more or less raffle out 50,000 visas a 
year, actually slightly less than that. In the last lottery 
round, over 5 million people applied.
    Senator Sessions. You're kidding! Five million?
    Mr. Borjas. No, 5 million people applied--5 million people 
applied for 50,000 slots. Now the probability of winning the 
lottery is far lower than getting into Harvard, for example. 
It's just an unbelievable price that people value that at and 
the number of applications to the lottery actually indicates 
that. If you go back in time a little bit, before 9/11, the 
last lottery before 9/11 attracted 11 million applications for 
50,000 slots. So that just tells you the excess demand 
available out there for entry into the United States and that's 
why I stressed in my discussion that even if we were to switch 
to a highly skilled immigration policy, the number of people 
who want to come to this country is way, way greater than what 
we would be willing to admit to be able to maintain economic 
stability in this country.
    Senator Sessions. Well, I think that is so basic. I won't 
ask you to say it. I'll say it, in my view, on the bill that we 
passed in the Senate that got a majority of the votes, gave no 
thought to these issues. We've never discussed them, as we set 
the policy before. Now, Mr. Massey, I think you had written 
about--I don't know where, I had it here--an article in June 
2005 for CATO, entitled, ``Backfire at the Border,'' and you 
advocated an elimination of the family preference, not for 
wives and children but for brothers and sisters. Is that 
correct? And isn't that, in a way, saying that we ought to have 
some other selection criteria for this large number that want 
to come and pick who comes, other than just being a sibling? 
Just maybe your thoughts on that.
    Mr. Massey. It's all a matter of emphasis in the 
immigration system and I do think that the family side has 
received somewhat more emphasis than it needs. In this day and 
age, I think if you decide to become an immigrant and come to 
the United States, you are not breaking contact with your 
brothers and sisters. You can go back and visit them. They can 
come visit you. It's not a hardship like perhaps it once was. 
The brother and sister provision of immigration law is the 
single most important factor for the immigration chaining--that 
is, the creation of networks that bring more migrants. So if 
you eliminate that provision, I don't think you'll impose due 
family hardship on immigrants and you'll also eliminate the 
single most important factor in immigration law, that promotes 
the proliferation of networks that actually bring more people 
into the United States. So it was my effort to come to a more 
balanced assessment. Not that I oppose family immigration. I 
think it is only right and proper that spouses be allowed to 
support their spouse in coming and bringing their children and 
perhaps even their parents. But brothers and sisters, I don't 
see as a terrible hardship in this day and age and it promotes 
the chaining of migration, it actually fuels the networks that 
produce more.
    Senator Sessions. It gets us further away, I think, from a 
merit-based system. I think about--I'd share the Mexican-
American enter problem, entering for a couple of years. We had 
a great conference in Pueblo, Mexico that just strikes my mind. 
I think about a young person there that was valedictorian of 
his class, took 3 years of English, has no family members in 
the United States and applies to enter, Professor Borjas, and 
he is competing against a person who happens to be the--who is 
a high school drop-out. He speaks no English but has a brother 
in the United States. Isn't that the current policy and could 
we make it better?
    Mr. Borjas. Well, just think about another way. Look at 
actually the key--I mean, it effects the quarter on how many 
siblings can enter the United States in any given year and the 
quarter is by country. So in some countries, a quarter--the 
law, the queue is actually unbelievably long. I may not have 
the exact dates right now but I'm pretty close to the exact 
date. I believe that as of right now, if your Filipino brother 
living in the United States sponsors your entry, your number 
will come up, if you apply in 1980 through 1984. So there is 
like a 20-, 22-year queue already from the Philippines. Even in 
Mexico, I think that the queue is like 10 or 15 years long. So 
again, that is actually an important thing to discuss when one 
looks at the fairness of having an amnesty program, whatever 
you want to call it, regarding how to treat the illegal 
immigrants now living in the United States with people who 
applied 10, 15, 20 years ago and are still waiting in line. It 
is really the sibling provision that creates a lot of those 
    Senator Sessions. I couldn't agree more. Just sharing some 
thoughts with you, Senator Specter and I have traveled in South 
America and the Dominican Republic recently and we noticed an 
article about a poll in Nicaragua that said 60 percent of the 
people of Nicaragua would come to the United States if they 
could. I thought the number would be high but that was 
stunning. I shared that with, I believe, the ambassador or one 
of his staff in Peru and they said they had done a poll earlier 
this year that said 70 percent would come if they could. I 
think about, well--if you can't accept everybody, let's try to 
create a rationale system. Let me do this question here.
    Under our current immigration laws, 80 to 90 percent of 
people who come legally come here solely based on family 
relations or a humanitarian purpose. That's a pretty large 
number and in the Dominican Republic, the Consultant Office who 
approves the visas said that virtually everybody there comes on 
a family connection. They have fraudulent marriages sometimes 
but whatever it is, it is mainly family connection. In fiscal 
year 2005, a total of 1.1 million aliens became lawful, 
permanent residents with Green Cards. Almost 60 percent were 
family sponsored. Forty-four percent were diversity lottery 
immigrants, 16 percent were humanitarian immigrants and about 
20 percent were employment-based. So this means that 80 percent 
of the immigrant inflow for the United States has no skill set 
    Consider the fact that the family members of an employment-
based immigrants come in under the employment-based category, 
not the family category and that number, with no skill-set 
evaluation, really is closer to 90 percent. It just makes sense 
and you've written about it, Mr. Borjas. I don't want you to 
repeat too much but would you comment on that and your thoughts 
about it?
    Mr. Borjas. Let me put it in context. I think the question 
would really make sense to have that kind of immigration 
policy. It really goes back to the question I discussed in my 
talk, which is, what do we want to accomplish with immigration? 
Who do we want to help out from it? If we want immigration to 
be as an anti-poverty program for people all over the world, 
then what we are doing is probably just fine because we're 
creating opportunities to many, many people who would otherwise 
never have that kind of opportunity. But at the same time, that 
kind of goal implies a cost to people over here. I mean, most 
particularly, the price and cost to taxpayers and it implies a 
cost to low-skilled workers who already live in the United 
States, including the immigrants themselves, because they do 
compete in the labor market. So one has to sort of balance 
those different objectives. There is a humanitarian aspect to 
all this that one should not forget. But at the same time, 
having an immigration policy that distorts the low-skill labor 
market so much and that increases the potential for many more 
people to enter the public assistance system, the welfare State 
and perhaps for a very long time. That really cannot be in the 
self-interests of this country in the long run and that is why, 
in my book, I sort of try to argue that if one were to focus on 
economic issues alone, one could make a pretty good case that 
what we are doing now is not really the best thing we should be 
doing. We can do better than that.
    Senator Sessions. Australia, amazingly, we met with the 
Australian officials, just private conversation and they 
explained their program. They don't admit any low-skilled 
workers. They take only high-skilled and brings in other 
characteristics. They have humanitarian, they have a lot of 
things and family but when it comes down to workers, they focus 
on a higher scale. Are you familiar with that, Mr. Tonelson?
    Mr. Tonelson. Not very.
    Senator Sessions. I think about--I guess I'd think about my 
votes. I'm going to have to take maybe about a 7-minute break 
to vote and come back. But I'm thinking about--I'll put it in a 
personal term. I met on the mall a few weeks ago--I was taking 
a walk on Saturday morning in Alabama and an African-American 
spoke to me and we chatted. He had his family out. He said that 
they were visiting a relative. I asked him how things were 
doing and he said, ``Fine.'' He was in the concrete finishing 
business. His father had been in the business. I said, ``How is 
it going?'' and he said, ``Not good.'' I knew Montgomery where 
he was from, that the economy is booming and I just threw out, 
I said, ``Do you think immigration would have something to do 
with that?'' He said, ``yes,'' he did and he thought immigrants 
were decent people and fine and great. He had no objection but 
he did think it was impacting him. I even think about people at 
the food service places. If there is a shortage, normally you 
would expect their asset--if we buy gold and it goes up, we 
expect to sell it for a higher price--their asset, their labor 
is not being allowed to be driven up by market forces because 
we're bringing in what could be an unlimited supply of labor. 
Is that a correct analysis?
    Mr. Tonelson. That seems to be all too clear from the most 
authoritative source of wage data that we have. Now, you could 
say, ``Well, it's not just wages.'' There are all other forms 
of compensation but most of these low-paying service jobs do 
not carry great health plans and great pension plans at all. In 
fact, even in higher wage sectors, you see benefits and 
pensions being pared back dramatically if not eliminated. So, 
it just doesn't stand to reason that if a certain company is 
desperate for workers, that it is offering lower and lower 
wages, that it is making these jobs less attractive to hold 
rather than more attractive to hold. Now, this may mean that we 
really don't know anything about economics. Maybe everything 
that we learned in college and Economics 101 is wrong. But I 
don't think that's so.
    Senator Sessions. Let me take this vote right now. It won't 
take me but a few minutes to vote. It's a cloture vote and if 
you don't mind, I'd like to come back and pursue this a little 
more, if we could. Thank you. We'll be right back.
    Senator Sessions. Thank you for staying. Professor Beach, 
how does Canada handle seasonal work in industries like 
agriculture and I'll just add, when Senator Specter and I were 
in South America, in Colombia, President Uribe told us that 
they had a very successful seasonal work program with Canada, I 
think, in Spain and I was told that the Dominican Republic 
also, when we were there, had a very successful program and 
they said, ``What is the problem? People go to Canada and come 
back. We don't understand.'' And so, would you share with us 
how Canada does that and is it distinct from its citizenship 
    Mr. Beach. Sure, thank you. I'm not a specialist on the 
temporary work program, which this comes under but it is my 
understanding that these seasonal workers--essentially 
agricultural, in the agricultural area, in Southern Ontario and 
British Columbia--come in under a program for temporary visa 
workers. Now, the exact details of how that functions, I'm not 
sure. Presumably, they apply, there is some sort of application 
process and a decision is made to admit a certain number. It is 
for temporary workers, so they can't just come do their work 
and stay. They have to go back and that does seem to work 
reasonably well. Now, it is my understanding that almost all of 
them come from Central America and Mexico, so I'm not at all 
surprised with what you saw down there.
    Senator Sessions. The number I had, I believe we got from 
Canadian officials, was that they have about a 98 to 99 percent 
compliance rate, is that consistent with what you----
    Mr. Beach. That would be my sense, that's right. Because if 
there starts to be abuses of that system, that would be picked 
up quite quickly by the media because statistics are open and 
there would be a lot of debate and you can certainly expect 
that they would start making some major changes on that, yes.
    Senator Sessions. And Professor Beach, I recently found 
that continuation of the 2002-2003 migration program in 
Australia--I don't know if you are familiar with it but I'll 
ask you and I'll ask the others, a recent study found that in 
Australia, that program will deliver an increase in living 
standards of $852 per person by 2021. This is a gain due, they 
say, to the skills stream that they utilize. The study suggests 
that the gain is equivalent to the effect of a $21 billion tax 
cut and dwarfs the projected gain of under $200 per person from 
the policy reforms of eliminating existing import tariffs on 
motor vehicles, clothes and footwear. The analysis by Access 
Economics demonstrates that continuing the 2004-2005 migration 
program in Australia is expected to deliver a net benefit in 
excess of $4 billion for 4 years. Are you familiar with that 
    Mr. Beach. I'm not familiar with that study. I'm also 
pretty sure that a study like that has not been done for 
Canada, otherwise I would have heard about it.
    Senator Sessions. I was told by the Australian officials 
here recently, from the Embassy who deals with immigration 
issues that they felt the way they were working it, it was an 
economic benefit to them all.
    Mr. Beach. Yes. They have, in some ways, a stricter policy 
toward high-skilled workers than Canada does so it wouldn't 
surprise me that they could get some quite strong results. But 
one can certainly do that kind of calculation for Canada. In 
fact, Professor Borjas is the one who developed the technique 
to do that sort of thing.
    Senator Sessions. Either one of you care to comment on that 
    Mr. Tonelson. Well not so much on that particular study but 
it seems to me that Professor Massey was right when he said 
that the real issue we face is an issue of balance and that's 
often what public policymakers deal with. You've got many very 
legitimate competing interests. How do you balance them all 
into the most effective way? But that also means that you have 
to ask yourself, what are our priorities? We can have many 
valid goals for American immigration policy but we need 
priorities and it seems to me--it stands to reason that the No. 
1 priority is strengthening the American economy and helping to 
raise the incomes of U.S. workers, of native-born workers and 
legal residents. That may not command universal assent but I 
think you'd have a hard time finding any American leader who 
would explicitly disagree with that and I think that it has 
also been quite well established, certainly at this hearing, 
that U.S. immigration policy does not attach a high enough 
priority to those economic goals and that it does attach too 
high a priority to noneconomic goals like family reunification.
    Senator Sessions. In April 2006, ``Time'' did a cover story 
on the Nation's high school dropout rate. According to the 
article, high school dropouts are, ``relegated to the most 
punishing sector of the economy where low wage jobs are 
increasingly filled by even lower wage immigrants.'' If this is 
true, I think it is a problem for us and I believe that is 
true. So Mr. Tonelson, I'm not sure you are aware, I know Dr. 
Borjas is, maybe Dr. Massey is, that in 1997, the National 
Research Council, which is part of the National Academy of 
Sciences told us that a high school drop-out costs the United 
States $89,000 more in social services than they pay in taxes 
over the course of their lifetime. It does not matter if that 
high school dropout was born in the United States or immigrated 
to the United States. Robert Rector from the Heritage 
Foundation tells us that the number is closer to $100,000 due 
to inflation. That was a number of years ago. He also tells me 
that in the last 20 years, the United States has imported 
through legal and illegal immigration, 11 million high school 
dropouts. If the $100,000 figure is true, these persons would 
cost the U.S. Treasury $1 trillion more in their lifetime than 
they will pay in. Now, that is--I don't know if those numbers 
are precisely correct but I think there is truth in those 
numbers. Would either of you want to comment on that?
    Mr. Massey. One more point that I would make and that data 
is certainly consistent with everything that we know about the 
relationship between wages and incomes on the one hand and 
skill and knowledge levels on the other hand. This kind of 
immigration policy also enormously feeds our Nation's appetite 
for public services, including entitlements and especially as 
this wage deterioration creeps up the--in fact, not even 
creeps. That's the wrong word--proceeds very steadily up the 
entire income ladder, more and more of even the U.S. middle 
class again becomes dependent upon entitlements to the degree 
that we never have before. Now, clearly, there is a real 
problem with inflation in health care and things of that nature 
but also, it is equally clear that the earnings--the wages and 
earnings of most working people have not nearly capped off and 
in fact, we know that there has been wage stagnation in this 
Nation for the median worker for 30 or 35 years now. That's 
never happened before in U.S. history.
    Senator Sessions. Well, just to put in an exclusive term, 
let's think about a beef packing plant. If you were a native 
and worked in the beef packing plant and you had no 
immigration, you'd be a very valuable commodity to the meat 
packing plant, is that correct?
    Mr. Tonelson. Absolutely.
    Senator Sessions. It would be glory days for you 
    Mr. Tonelson. Exactly and it would probably raise the cost 
of meat unless the meat producers figure out a way to increase 
productivity and that's how we make progress. That's a major 
    Senator Sessions. But it wouldn't double the price of beef.
    Mr. Tonelson. Not right away, I'm sure.
    Senator Sessions. No, I don't think so either.
    Mr. Massey.
    Mr. Massey. I'm very familiar with 1997 and our report. I'm 
actually a member of the National Academy of Sciences and there 
have been a number of changes that have occurred. Congress, as 
you know, passed in 1996 both the Immigration Welfare Reform 
Acts and that really kind of changed the calculus for a lot of 
immigration and what we've seen since 1996, are rising rates of 
tax payment by immigrants and falling rates of service 
utilization by immigrants, across all categories. This is true 
of both documented and undocumented migrants. They are less 
likely to use and more likely to pay. So I don't think the 
figures are as stark as they were calculated to be in 1997.
    Senator Sessions. The Congressional Budget Office, at my 
request--and truly, they only had a matter of days--I asked 
them to evaluate the fiscal costs to the U.S. Treasury right 
before we voted on the immigration bill, which amazingly, 
nobody had asked for. They came back, showing on the first 10 
years, a slight gain to the Treasury, which I frankly had some 
doubt about. The proponents of the legislation waved that 
around. They admitted, however, that the second 10 years would 
be much worse because the Green Card, the permanent resident 
status, was pushed out after some of the amendments, to about 
Year Ten. So that's when you get the earned income tax credit 
and qualify for Medicaid, Medicare and other things. Now 
they've redone that and they've said that there will not be any 
gain in the first few--and this is talking about welfare, food 
stamps, all of that as compared with what they pay in taxes. 
Say it could be as high as $126 billion deficit and admittedly 
much higher in the next 10 years. Robert Rector estimates after 
that first 10 or 11 years, it would run about as high as $50 
billion a year, half a trillion dollars over 10, based on the 
policies set forth in the bill that we passed in the Senate. 
But it appears not to be moving forward. So that's the latest, 
best numbers we've got on the impact on the U.S. Treasury. Do 
you have any comments on that, Mr. Beach, if you're familiar 
with it?
    Mr. Beach. Not on the U.S. situation but in Canada, the 
fiscal effects of immigration are expected, particularly in the 
long run, to be very strongly positive because if you bring in 
people, particularly if they are young and hardworking and they 
have good skills, initially they may have some difficulties 
settling in but then once they do, they earn a good income and 
pay taxes. They make below-average use of social security 
services, this sort of thing, so they are less a drag on the 
expenditure side and they bring in considerably more money on 
the revenue side. Also, if you are bringing in younger people 
rather than older people, that means they have a longer time to 
contribute to things like the Canada pension plan and so on. So 
when they retire, they are less a drag on the system. In fact, 
they've contributed through their taxes, supporting people like 
    Senator Sessions. Right.
    Mr. Beach. We have several studies on that so the evidence 
is fairly clear-cut there, yes.
    Senator Sessions. I'm sorry Dr. Borjas is not here, but, 
Mr. Rector--he says it is a fiscal disaster and anybody that 
says that the current process of immigration will strengthen 
things like Medicare and Social Security are living in a dream 
world. He was basically very critical of that analysis mainly 
because he points out that of the people here illegally, 60 
percent are not high school graduates and so, they are unlikely 
to have a wage sufficient to cause them to pay any income taxes 
and they certainly--so it is a real dilemma and there are no 
easy answers. It is interesting that I hear you say that Canada 
believes that it will be a net fiscal plus and Australia told 
me that also.
    Mr. Beach. Yes. Part of what is going on, the difference in 
results between Canada and the United States is that we have 
very few illegal immigrants and so the figures I was giving you 
were simply for the legal immigrants. Again, in the United 
States, you have this large number of illegal immigrants and 
that could, indeed, cause quite different calculations and 
    Mr. Tonelson. I think that something else we have to 
recognize about the results in the United States in recent 
years, we have to ask ourselves what was the American economy 
like in the late 1990s? What is it like now? I think it is very 
clear that much of the growth, the strong growth that we had in 
the late 1990s was due to a stock market bubble, a technology 
bubble, that generated levels of economic activity--of output 
for products for which there were no markets and for which 
there were not going to be markets for years and years and 
years and that, of course, didn't last. What has happened to 
the U.S. economy since 9/11? Unprecedented stimulus poured in 
to buoy economic activity artificially. And we still have not 
come close to the growth rates that we achieved back in the 
1960s, let's say, with much less U.S. Government stimulus. We 
have essentially been pulling rabbits out of our hats and 
clearly, that's benefited all Americans in the short run but if 
you think, as I do, we're running out of rabbits, you'll be 
worried about this and it is very hard to imagine that going 
forward, folks with low skills and poor schooling will not be 
net drags on the American economy.
    Senator Sessions. Mr. Massey, do you want to wrap this 
thing up?
    Mr. Massey. Well, if you look at America's age structure, 
we're rapidly aging, if you just look at the native population 
and there is going to be a progressive mismatch between the 
demography of the workforce that we'll require and the 
demography of the people, the native population. You really see 
this--the largest projected category for growth is health 
service workers, which is an unskilled category. That is 
supposed to grow 33 percent in the next 10 years and that is 
going to continue to grow at a rapid rate because of the 
population aging even more after that. So I think that is not 
whether we are going to take in relatively unskilled workers or 
not, it is really how many and under what terms. I don't think 
that we have the optimal situation right now. Personally, I 
would favor some kind of guest worker program because I've been 
working in Latin America for 25 years and been collecting data 
continuously in Mexico since 1982. The typical Mexican migrant, 
when they leave for the United States, 70 percent say they may 
want to come but that doesn't mean they want to stay. They are 
culturally Mexican and the typical migrant, when they leave, is 
not leaving because he is abjectly poor, has no prospects, no 
possibility of survival in Mexico. He is leaving because he has 
got a mobility project. He wants to finance the construction of 
his house because there aren't good mortgage markets in Mexico. 
He wants to pay for the education of his kids. He wants to 
acquire capital to found a business in Mexico, in the absence 
of good credit markets. So they migrate to the United States. 
If you created a mechanism for them to do this, they would work 
and they would return.
    Senator Sessions. Could I be frank--there was a part of a 
bill, they called it ``temporary guest worker program'' and 
that is what people kept saying, is a temporary guest worker 
program but when we read the print on it, what it said was, 
people would come in under that program. They could bring their 
families. They could stay for 3 years. They could extend for 3 
years, 3 or 4--how many times? Twelve? And then after the 
second extension, they could apply for a Green Card and then on 
the route to citizenship. So there was really nothing temporary 
about it but I think about what President Uribe told me, how 
happy they were in Colombia. Their people could fly apparently 
to Canada and work 8 months and come back home. They don't take 
their family and they make a good bit of money and they can 
build that house and fix it up and educate their children. Is 
that more of your understanding? Now, one of the bill sponsors 
said, Well, I don't like that. I think that's creating a 
second-class citizen.'' Not a citizen, we're creating a class 
separated from our traditions or something to that effect. But 
to me, a program would allow you to come, a certain number, 
depending on what the labor studies show, for so many months 
without a family, with the option to return back and forth 
during that time, if you're able, would be something I could 
probably support. Would you opine on that?
    Mr. Tonelson. I think a program like that would handle a 
huge share of Mexican migrants right now. Now, it's true--the 
old joke, there is nothing as permanent as a temporary worker 
program. Always, there is going to be some fraction that 
settles out and the goal of public policy should not be to 
prevent people from settling out period but to minimize the 
fraction. If you make it easier for people to go back and give 
them incentives to go back, you are simply reinforcing their 
natural inclination. The natural inclination is not to move 
here permanently but to use the U.S. labor market 
instrumentally on a couple of visits, to improve their lives at 
home. The ironic effect of really sealing the border is that 
you don't prevent people from coming in so much but you really 
discourage them from going home because it is so difficult to 
get in, they are afraid they won't be able to get back in if 
they need to, in the future, so they just hunker down and stay. 
And we've actually, over the past 20 years, radically depressed 
the rate of return migration among undocumented migrants. So 
the big buildup that document migrants to the United States 
hasn't come from an increase in the rate of in-migration--that 
has been fairly stable for 20 years--it has really come from a 
rapid fall-off in the rate of out-migration, which dates to our 
militarization of the border starting in 1993.
    Senator Sessions. Let me go to Mr. Beach now.
    Mr. Beach. Just to followup a bit on your comment on the 
temporary workers, where they could come in, say 3 years plus 3 
years. I think one might want to think about that perhaps a bit 
more. It is my understanding that programs like that have been 
used in Europe for some years and they are behind a bit of some 
of the problems they've had. If workers are going to be here 
for say, 3 years, they may marry, settle down, raise families. 
Then after 6 years, what is going to happen? They may well be, 
in some sense, second-class citizens. They feel that badly. The 
kids may not have access to the kind of schooling, whatever it 
is, their health care.
    Senator Sessions. Um hmm. Now, that's why----
    Mr. Beach. I think that can----
    Senator Sessions. That was the criticism of one of our--the 
sponsor said, in effect--I think he mentioned Europe. We don't 
want to create that kind of system but in Europe, it is an 
extended right to work plus a right to extend that again and 
again, right?
    Mr. Beach. That's right. But it is also my understanding 
that the rights of such workers are certainly not those of 
    Senator Sessions. Right. And they are there with their 
family, they are there decades and they have no prospect of 
moving to citizenship. That is a situation I would not favor.
    Mr. Tonelson.
    Mr. Tonelson. I found Professor Massey's comments on the 
motivations for Mexican immigration to be a little bit unusual 
in light of what we've seen during the very significant street 
protests. We saw all around this Nation in the spring, where 
what was the major theme? We not only want legalization, we 
want citizenship, we want to vote and when we start to vote, 
we're going to vote in such ways that wind up punishing any 
politician who has been on the restrictionist side. And that's 
not really--it's not consistent with the notion that most of 
them don't want to stay.
    Senator Sessions. I think there is a lot of truth, though, 
Dr. Massey, in what you say but maybe you will respond to that.
    Mr. Massey. Well, I imagine I talk to a lot more migrants 
than you do.
    Mr. Tonelson. Well, you probably do. But boy, I've heard a 
lot of that.
    Mr. Massey. Well, what you heard is a lot of public 
clamoring filtered through the press and that's not an accurate 
portrayal of the typical migrant and the people out 
demonstrating are probably not an average cross section of 
migrants. A lot of those are native-born Mexican Americans.
    Senator Sessions. Well, could I just go back to this 
question, because there is something that I have suggested and 
I'm not sure it has registered. If we had the kind of program 
that Canada has, my view is that you probably should not come 
for more than 10 months at a time, you would not bring your 
family but you would be able to return and go get an 
identification card however many times you choose during that 
10 months and could therefore help us with some of the seasonal 
industries that we have. It's hard to get an American to 
operate a cotton gin if they are only going to do it for 3 
months of the year. I mean, they'd rather work at Wal-Mart at 
less hourly pay as it's permanent, it's got benefits, that sort 
of thing. So, there are some seasonal jobs there throughout 
agriculture. Do you see any moral or legal or policy problems 
with having that as one category, one aspect of an overall 
immigration policy?
    Mr. Massey.
    Mr. Massey. No, not under the proper terms, as long as it 
is not a brutally exploitive system that takes advantage of the 
migrant workers. We ran such a program in the United States 
from 1942 to 1964, known as the Bracero Program. In 1953-1954, 
there was a crisis of illegal migration in the United States 
and for the first time in U.S. history, there were a million 
apprehensions of illegal Mexicans in the country and Congress 
responded in two ways. One, they tightened up border 
enforcement but the other thing it did, was it dramatically 
expanded the Bracero Program, basically doubling its size, 
basically going from about 150,000 a year to over 400,000 a 
year for the whole period 1955 to 1960. During this period, 
illegal migration fell from a million apprehensions in 1953-
1954 down to about 30,000 per year by 1959. So basically, it 
was a two-pronged approach. They tightened enforcement at the 
border but I really think the drop-off in undocumented 
migration is because there was a legal channel for people to 
move and at this point, legal settlement from Mexico was not 
quantitatively limited so Braceros managed to acquire ties to 
the United States and acquire a reason to stay here. They 
became a foreman, for example, rather than a circular worker 
and they managed the workers for a farmer. They could acquire 
permanent resident status and settle down. It was actually a 
fairly good system that, over the course of 22 years, 
circulated in and out of the country around 5 million Mexican 
workers and only resulted in the net settlement of several 
hundred thousand.
    Senator Sessions. Well, these are all very, very 
interesting topics and I think you would all agree with me that 
if we really redo our immigration policy, we should wrestle 
with these issues and I, for one, am firmly convinced that 
there are far more people who want to come here than we can 
ever assimilate effectively. We know that and we need to 
develop a policy that identifies those who have the more 
meritorious claims for entry, who would be more likely to be 
successful, who will more likely contribute more to the 
government than they will take out from the government and just 
be more successful. So I think that's the direction we need to 
move in but I'm not sure my colleagues agree. I think the House 
is just not focused on this issue. They have not discussed it. 
They said we had to have credibility for the enforcement first. 
Our basic plan was just to increase numbers and carry on the 
existing programs. That's about all it does and has some 
enforcement in it. But if we listen to people like you and we 
do a humane, legitimate program, I think we can identify people 
who want to come here and become citizens. I think there may be 
a role for a temporary worker program and it would certainly be 
helpful to our neighbor. That would be an easy move for them. 
We could, with a little effort--I'm convinced we can do more 
with the law enforcement than people think and literally, we 
could create a policy that will work and that the American 
people will be proud of. But we don't have that consensus now 
and I'm hoping the information you've given us can help reach 
that consensus.
    If there is nothing else, we'll keep the record open for 10 
days and if you have any further statements and any of the 
members can submit questions at any time, we would appreciate 
it if you would respond. Thank you very much for your 
attendance and testimony.
    Mr. Tonelson. Thank you, sir.
    Senator Sessions. We are adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

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                        Law Library of Congress
             Immigration Points Systems for Skilled Workers
                          comparative summary
Executive Summary
    While Australia, Canada, New Zealand, Singapore, and the United 
Kingdom all issue different types of immigrant or work visas, they all 
have a category for highly skilled workers. As the number of these 
visas is generally limited, the five countries employ points systems 
designed to attract persons who will best meet the countries' economic 
needs. France issues skills and talents residency cards based on 
similar criteria, without allocating points.
    Australia, Canada, New Zealand, Singapore, and the United Kingdom 
all issue immigrant, residence, or work visas to qualified refugees, 
family members, and workers or independent applicants. Canada and the 
United Kingdom have work permit programs for unskilled workers, while 
Australia, New Zealand, and Singapore generally admit persons who 
qualify as skilled workers. In all four cases, however, skilled workers 
are assessed in accordance with a points system that has been designed 
specifically for their class. In all four countries, the skilled worker 
class is the largest immigrant or work permit class. In 2004, Canada 
admitted 133,000 persons as skilled or independent workers. In 2005-
2006, a total of 97,500 were allocated to the general skilled worker 
program. In 2005-2006, New Zealand approved almost 31,000 skilled 
worker applications. In the United Kingdom, the skilled worker class 
has recently been expanded to attract MBAs from designated renowned 
    In Canada, skilled workers must accumulate at least 67 points out 
of a total of 100 to be eligible for admission as a permanent resident. 
In descending order, the six weighted selection criteria are education, 
French and English language skills, work experience, age, arranged 
employment, and adaptability. Australia has a ``pass mark'' in the 110-
120 range and a ``pool mark'' in the 70-120 range for persons that may 
be awarded migration visas not claimed by persons who have scored above 
the pass mark. The selection criteria are age, work experience, 
occupational demand, and English language ability. In New Zealand, the 
selection point is revised every 2 weeks. The most recent selection 
point was 140 points. Persons scoring between 100-140 points may apply 
for residence permits not claimed by persons who have scored more than 
140 points. The selection criteria are job opportunities, relevant work 
experience, qualifications, age, and family relations.
    In the United Kingdom the creation of the highly skilled migrant 
program has been described as ``the most dramatic development in 
commercial immigration law for the past 30 years and has made many of 
the other commercial immigration categories effectively redundant.'' 
The highly skilled migrant program is operated on a points system with 
a pass mark of 65 or more. Points are awarded for educational 
qualifications, work experience, past earnings, achievements in the 
applicant's field, achievements of the applicant's partner, and age. In 
2005, the government created a new program for persons holding an MBA 
from one of the top 50 business schools designated by the Treasury. 
This program is designed to attract highly qualified and talented 
managers to the U.K.
    Singapore employs a points system for the issuance of ``S Passes.'' 
These passes are issued for skilled technicians and middle-level 
managers with a monthly salary above SGD$1,800. The selection criteria 
are salary, education, work experience, and job type. Singapore does 
not publish detailed descriptions of its assessment process.
    In Canada and New Zealand, applicants accepted as skilled workers 
are offered permanent residence. In Australia and the United Kingdom, 
accepted applicants are issued visas that can be renewed. After a 
qualifying period, visa holders can apply for permanent residence.
    France has recently created a program for the admission of skilled 
workers that creates a new type of residency card. These skills and 
talents residency cards are valid for 3 years and may generally be 
renewed. However, concern that this program might otherwise result in 
the permanent loss of persons with the most training and experience by 
African countries has led the government to allow only one renewal of a 
visa issued to a person from one of the scheduled African countries. 
France does not employ a point system in issuing skills and talents 
residency cards but considers many of the same factors scored in 
Australia, Canada, New Zealand, Singapore, and the United Kingdom.

    (Prepared by Stephen F. Clarke, Senior Foreign Law Specialist, July 
                        Law Library of Congress
             immigration points system for skilled workers
Executive Summary
    Australia maintains an immigration points system for selection of 
independent skilled migrants, Australian sponsored skilled migrants, 
and State specific/regional sponsored skilled migrants. The objective 
of the skilled migrant visas is to enhance Australia's economy by 
allowing skilled people access into Australia's workforce. Skilled 
migrants must meet minimum health, character, language and age criteria 
and are then awarded ``points'' on the basis of age, occupation, 
language skills, work experience, qualification and sponsorship.

I. Current Immigration Law

    In general all non-citizens require a valid visa to enter 
Australia.\1\ The Commonwealth of Australia (Australia) has a migration 
program that permits persons to migrate to Australia, or, if currently 
living within Australia, to obtain ``permanent residence.'' The 
Department of Immigration and Multicultural Affairs administers 
Australia's migration programs.\2\ The principal pieces of legislation 
are the Migration Act 1958 (Cth) and the Migration Regulations 1994 
(Cth); Ministerial Directions (made under Migration Act Sec. 499) and 
Government Gazette Notices, however, may also be applicable.
    \1\ Migration Act 1958 (Cth) s42.
    \2\ Department of Immigration and Multicultural Affairs, 
www.immi.gov.au, (last visited July 12, 2006).
    The Migration Regulations contain most of the specific details and 
criteria for each visa. Visas are divided into classes and subclasses. 
Schedule 1 of the Migration Regulations lists the visa classes and some 
requirements for each class (such as procedures for visa applications, 
time limits and review provisions). Schedule 2 of the Migration 
Regulations details the specific requirements for each subclass. 
Schedule 2 may refer to other schedules within the Migration 
Regulations or to Government Gazettes that contain additional criteria.
    Australia's migration program is divided into a ``Migration 
Program'' and a ``Humanitarian Program.'' Both these programs are 
divided into streams and categories of visas. Each visa has criteria 
that are specific to that visa \3\; however, there are some ``general 
public interest criteria'' relating to health and character that are 
common to all visas.
    \3\ Migration Act 1958 (Cth) s31(3).

II. Skilled Migration Numbers

    In 2005-2006 a total of 97,500 places \4\ will be allocated to 
skilled migration and 76,900 will be allocated to the general skilled 
migration program.\5\ The allocation of visas across visa types (for 
both primary and secondary visa applicants) is as follows \6\: 
Skilled--Independent--49,200 places; Skilled--Australian Family 
Sponsored--17,700 places; State Regional Sponsored (subclasses 495 & 
137)--10,000 places.
    \4\ The total expected migration program for 2005-2006 is 130,000-
140,000 places.
    \5\ Birrell, Bob, Hawthorne, Lesleyanne, and Richardson, Sue 
2006. p. 15.
    \6\ Id. The total includes the primary applicant and any secondary 
applicants (i.e., family members).
    Skilled migrants may also be eligible for employer-sponsored visas 
or business/investor visas.

III. Skilled Migration--Points System

    In general, the skilled stream of Australia's Migration Program is 
intended to enhance Australia's economy by allowing skilled people 
access into Australia's workforce.\7\
    \7\ In addition to skilled visas there are also visas available for 
sponsored employees and for persons seeking to establish a business 
within Australia.
    There are 12 different general skilled migration visas. These may 
be divided into: independent--requiring no sponsorship; Australian 
sponsored--requiring sponsorship by an eligible Australian relative; 
and, State/Territory specific visas that involve nomination or 
sponsorship by an Australian state or territory. Three of these visas 
are specific to overseas students who have completed Australian 
qualifications. A description of these visas is provided in Attachment 
    Most skill-based migration visas are assessed via a ``points'' 
system.\8\ Each visa has a ``pass mark,'' being the number of points 
necessary to obtain a visa and a ``pool mark'' being the number of 
points necessary to remain in a pool of applicants should there not be 
sufficient pass level applicants or should the pass mark be revised. 
Generally pass marks are 110-120 and pool marks range from 70-120.
    \8\ Migration Act 1958 (Cth) ss92-96.
    Under the ``points system,'' applicants, who must be between ages 
18 and 45 and have English language skills, are credited with 
``points'' primarily for qualifications (some visas require Australian 
qualifications), age, work experience, English language ability, and 
whether their occupation is in high demand. Additional points may be 
awarded where the applicant has a well-qualified spouse, is providing 
capital investment or has fluency in a community language. Attachment 2 
provides an overview of the allocation of points under the points test 
and current pass and pool marks.

    (Prepared by Lisa White, Foreign Law Specialist, July 2006.)

Attachment 1

                 Visa type                        Visa description
Independent...............................  Skilled--Independent
Does not require sponsorship                 (subclass 136) allows an
                                             applicant with skills
                                             required in the Australian
                                             labor market to migrate to
                                             Australia without the
                                             requirement of employer
                                             sponsorship. Applicable to
                                             offshore applicants.
                                             Overseas Student (Subclass
                                             880) is available for
                                             overseas students under 45
                                             years of age who have
                                             completed an eligible
                                             Australian qualification(s)
                                             after at least 2 years full-
                                             time study in Australia and
                                             have an occupation on the
                                             SOL list that is either a
                                             60 point occupation or a 50
                                             point occupation (if the
                                             overseas student has
                                             completed a Ph.D. in
                                             Australia). This visa does
                                             not have the threshold work
                                             experience requirement of
                                             the subclass 136 visa.
                                             Applicable to onshore
Australian sponsored......................  Skilled--Australian
Similar to Independent but additional        Sponsored (subclass 138)
 points may be claimed where the applicant   allows an applicant to
 is sponsored by an eligible relative and    migrate to Australia when
 pass mark is lower.                         they do not meet the
Applicants occupation must be on skilled     criteria for Skilled
 occupation list (SOL) and if their          Independent (subclass 136)
 sponsor is in Sydney and or other           but they have an Australian
 populated areas the applicant's             relative who is willing and
 occupation must be on the Sydney and        able to sponsor them.
 Selected Areas Skilled Shortage List       Skilled--Australian
 (SSASSL).                                   Sponsored Overseas Student
                                             (subclass 881) is available
                                             for eligible overseas
                                             students who have obtained
                                             an Australian qualification
                                             in Australia as a result of
                                             at least 2 years full-time
                                             study and have an
                                             Australian relative who is
                                             willing and able to sponsor
                                             the applicant. The points
                                             test for this visa is lower
                                             than the Skilled
                                             Independent Overseas
State specific and regional migration.....  State or Territory Nominated
                                             Independent (subclass 137)
                                             allows participating state
//                                             territory governments to
                                             nominate skilled migration
                                             applicants who are
                                             interested in permanently
                                             settling in states and
                                             territories where their
                                             skills are in demand. No
                                             points test per se but
                                             applicants must meet the
                                             pool mark of 70 points.
                                             Regional (subclass 495)
                                             allows an applicant who is
                                             sponsored by an Australian
                                             state or territory
                                             government to remain in
                                             Australia for up to 3 years
                                             to live and work in a
                                             regional or low-population
                                             growth area. After living
                                             in a regional or low
                                             population growth
                                             metropolitan area for 2
                                             years and working for at
                                             least 12 months in a
                                             regional or low population
                                             growth metropolitan area
                                             applicants may apply for a
                                             permanent visa. This visa
                                             has a slightly lower pass
                                             mark than the Independent
                                             (subclass 136).

    In addition to the above visas there are visas specifically for New 
Zealand citizens (Independent New Zealand Citizen subclass 861 and 
Australian Sponsored New Zealand Citizen subclass 862). They operate 
very similarly to the independent and sponsored visas described above 
(with the same points test pass mark but no pool option) but are only 
applicable to New Zealand citizens.

Attachment 2

    Within the Australian ``points system'' points are allocated on the 
following basis:

            Criteria                  Description      Available points
Age.............................  There is a general  18-29yrs----------
                                   criterion that      ---------------30
                                   the applicant is   30-34yrs----------
                                   above 18 and        ---------------25
                                   below 45 years of  35-39yrs----------
                                   age. Points are     ---------------20
                                   then allocated in  40-44yrs----------
                                   relation to the     ---------------15
                                   age of the
Occupation......................  An applicant must   Degree or trade
                                   nominate their      qualification
                                   occupation as one   specific to the
                                   that falls within   occupation-------
                                   the Skilled         ---------------60
                                   Occupation List    General tertiary
                                   (SOL). Points are   qualifications
                                   then awarded        unrelated to
                                   depending on the    occupation-------
                                   skill category of   ---------------50
                                   the applicant's    General diploma or
                                   occupation.         advanced diploma
                                                       not related to
Occupation--MODL................  Applicant's         Additionally
                                   nominated           applicant has job
                                   occupation is on    offer from
                                   the Migration       eligible
                                   Occupations in      organization-----
                                   Demand List         -------------20
                                   (MODL) when        Applicant does not
                                   application is      have a job offer--
                                   assessed            ----15
                                   additional points
                                   may be awarded.
English language skills.........  The applicant must  Competent---------
                                   have at least       ---------------20
                                   vocational         Vocational--------
                                   English. If there   ---------------15
                                   is any doubt as    Functional--------
                                   to the              ---------------Ni
                                   applicant's level   l
                                   of English they
                                   may be required
                                   to take the
                                   English Language
                                   Testing System
                                   (IELTS) test.
Specific work experience........  This is not an      Applicant's
                                   eligibility         nominated
                                   requirement but     occupation is
                                   is an optional      worth 60 points
                                   section in which    and the applicant
                                   the applicant may   has worked in
                                   be awarded points   that (or a
                                   for working in      closely related
                                   their nominated     occupation) for 3
                                   occupation.         of the past 4
                                                       years prior to
                                                       making the
                                                       occupation is
                                                       worth 40, 50 or
                                                       60 points and the
                                                       applicant has
                                                       worked in any
                                                       occupation listed
                                                       on the SOL for 3
                                                       of the past 4
                                                       years prior to
                                                       making the
Australian qualifications.......  Additional points   Doctorate of at
                                   may be awarded if   least 2 years
                                   the applicant       study------15
                                   holds Australian   Australian masters
                                   qualifications or   or honors (2:1)
                                   has undertaken      of at least 1
                                   study towards       year study--------
                                   such                ------------10
                                   qualifications     Two years study
                                   where the           towards degree,
                                   instruction was     diploma or trade
                                   given in English    qualification----
                                   in Australia.       -----------5
Regional area...................  Additional points   Two or more years
                                   may be awarded if   of study----------
                                   the applicant has   ----5
                                   lived and studied
                                   qualifications in
                                   population growth
                                   area. That is,
                                   not a capital
                                   city or populated
                                   area on the
                                   eastern seaboard.
Spouse skills...................  An applicant may    Spouse skills------
                                   be eligible for     -----------------
                                   additional points   -5
                                   if their spouse
                                   is able to
                                   satisfy basic
                                   requirements of
                                   age, English
                                   occupation and
                                   recent work
Bonus points....................  An applicant may    Capital
                                   be eligible for     investment-------
                                   bonus points on     -------------5
                                   one the following  Australian work
                                   (ie. even if the    experience
                                   applicant is       Community language
                                   eligible for more
                                   than one only one
                                   may be claimed):
                                  Capital investment
                                   in Australia of
                                   at least
                                   AUD100,000 for at
                                   least 12 months;
                                  Australian work
                                   experience in a
                                   SOL occupation
                                   for a period
//                                   periods totaling
                                   at least 6 months
                                   in the preceding
                                   48 months;
                                  Fluency (ie.
                                   level language
                                   skills) in a
                                   language (that is
                                   a language spoken
                                   in Australia).
Relationship of sponsor.........  Applicant or        Only applicable to
                                   applicant's         Australia
                                   spouse are          sponsored visas
                                   sponsored by an     (subclasses 138,
                                   Australian          881 & 862)--------
                                   citizen,            15
                                   resident or
                                   eligible New
                                   Zealand citizen.
                                   Sponsor must be
                                   related via non-
                                   dependent child,
                                   parent, sibling,
                                   niece, nephew,
                                   aunt or uncle.
State/territory sponsorship.....  Applicant is        Only applicable to
                                   sponsored by        Skilled--Independ
                                   authorized state    ent Regional
                                   or territory        (subclass 495)
                                   government agency.  visa----------10

    As of July 7, 2006 visa pass and pool marks are:

                                                     Current    Current
                     Category                       pass mark  pool mark
Skilled--Independent (subclass 136) visa..........        120         70
Skilled--Independent Regional (subclass 495) visa.        110        110
Skilled--Australian Sponsored (subclass 138) visa.        110        105
Skilled--Independent Overseas Student (subclass           120        120
 880) visa........................................
Skilled--Australian Sponsored Overseas Student            110        110
 (subclass 881) visa..............................
Skilled--Onshore Independent New Zealand Citizen          120        120
 (subclass 861) visa..............................
Skilled--Onshore Australian Sponsored New Zealand         110        110
 Citizen (subclass 862)...........................

                        Law Library of Congress
             immigration points system for skilled workers
Executive Summary
    Canada accepts six major categories of immigrants: skilled or 
independent workers, business immigrants, provincial nominees, family 
class immigrants, international adoptions, and Quebec-sponsored 
immigrants. Skilled workers are intended to comprise 60 percent of 
migrants. Refugees are also counted in Canadian immigration statistics. 
Preference systems are used either for determining eligibility for 
admission in most of these non-refugee categories or in processing 
applications. The most formal and detailed of the preference systems is 
used for skilled or independent workers because they are assessed on a 
points system. Preferences for family class immigrants are more 

I. Immigration Categories

    According to Citizenship and Immigration Canada's statistics, 
approximately 236,000 persons were admitted to Canada for permanent 
residence in 2004.\1\ Of those, 133,000 were admitted as skilled or 
independent workers; 62,000 as family class immigrants; 10,000 as 
business immigrants; 6,000 as provincial nominees; and 32,000 as 
refugees.\2\ The totals have remained fairly constant over the past 10 
    \1\ Citizenship and Immigration Canada, Facts and Figures 2004, 
available at http://www.cic.gc.ca/english/pub/facts2004/overview
    \2\ Id.
    Canada does not have country-based or worldwide quotas, but it does 
establish annual worldwide targets, and the actual numbers of 
immigrants accepted for permanent residence within a year are usually 
within 10 percent of those targets. Canada also does not provide that 
immigrants in any one category can only exceed its annual target by a 
certain percentage; there is, however, an understanding between 
Parliament and Citizenship and Immigration Canada that in enacting the 
current Immigration and Refugee Protection Act,\3\ Parliament intended 
to create a system in which skilled or independent workers would 
usually comprise about 60 percent of the annual total, and that skilled 
or independent workers would normally outnumber family class immigrants 
by a margin of approximately two to one. It is also understood that 
Parliament expects Citizenship and Immigration Canada to exercise the 
administrative powers conferred upon it in such a way as to preserve 
the current balance, and that any significant fluctuations in either 
direction would probably lead to legislative or administrative reforms. 
Thus, in processing applications submitted at Canadian Embassies or 
consulates, immigration officials attempt to adhere to the goals that 
are set out annually by Citizenship and Immigration Canada in 
consultation with the Government and appropriate parliamentary 
    \3\ 2001 S.C. ch. 27.

II. Skilled Workers

    Canada's process for selecting skilled workers is fairly complex. 
Prior to 2002, applicants were assessed on a point system that was 
weighted so that in the vast majority of cases, applicants had to be 
both suitable and have a job offer for a position that no Canadian 
citizen was willing and able to fill. In enacting its new law, 
Parliament adopted a slightly different philosophy. The current law 
seeks to identify the types of persons who are most likely to integrate 
into the Canadian workforce based upon their background. Less emphasis 
is now placed on specific job offers, although this is still a 
selection factor. The Canadian change of philosophy is based upon 
findings that persons with certain educational and work backgrounds 
generally become well integrated into Canadian society regardless of 
whether they have a specific position waiting for them or not.
    Under the current system, applicants must obtain at least 67 points 
out of a total of 100 possible points on the selection grid \4\ and 
have at least 1 year of work experience within the past 10 years in a 
management occupation or in an occupation normally requiring university 
or technical training set out in skill types identified in the National 
Occupational Classification.\5\ The six selection criteria and the 
maximum number of points available for each are as follows:
    \4\ Canada's points system is set out in sections 75-83 of the 
Immigration Regulations, SOR2002/227, as amended, available at http:/
//laws.justice.gc.ca/en/I-2.5/SOR-2002-227/index.html (last visited May 
1, 2006).
    \5\ Citizenship and Immigration Canada, Skilled Worker Self 
Assessment, http://www.cic.gc.ca/english/skilled/assess/index.html 
(last visited May 1, 2006).
    1. education. A maximum of 25 points can be earned by a person who 
has a Master's Degree or Ph.D. and at least 17 years of full-time or 
full-time equivalent study. The lowest number of points awardable is 
five for completion of high school;
    2. languages. A maximum of 24 points can be awarded to persons who 
are highly proficient in both official languages. Sixteen points can be 
awarded for either French or English and eight for the other. Written 
and oral tests are administered to ascertain a person's abilities in 
different language areas;
    3. experience. A maximum of 21 points can be awarded for experience 
in the approved occupations. The law allows Citizenship and Immigration 
Canada to designate certain professions as being restricted to guard 
against labor surpluses. However, at the present time, there are no 
professions that are designated being restricted;
    4. age. A maximum of 10 points is awarded to persons who are 
between 21 and 49. Persons outside this range lose two points for each 
year that they are under 21 or over 49;
    5. arranged employment. A person may be awarded 10 points for 
having a permanent job offer that has been confirmed by Human Resources 
and Skills Development Canada; and
    6. adaptability. A person may be awarded additional points for a 
spouse's education, previous work in Canada, study in Canada, arranged 
employment, and family relations in Canada.
    Each selection factor is broken down in charts that show how points 
are awarded.\6\
    \6\ Citizenship and Immigration Canada, Six Selection Factors and 
Pass Mark, http://www.cic.gc.ca/english/skilled/qual-5.html (last 
visited May 1, 2006).

III. Family Class Immigrants

    Family class immigrants are not assessed on a points system, but 
preferences are given to applicants based upon their relationship to 
their sponsor. The administrative practice is to process applications 
from spouses and dependent children the most quickly. Applications from 
parents, grandparents, relatives who are orphans and under the age of 
18, as well as children under guardianship, are generally given lower 
preferences. Because family class preferences are based on 
administrative practices rather than on legal requirements, they 
generally are flexible.
    Canada has a narrower definition of family class immigration than 
does the United States. Applicants who do not fit into one of the above 
categories still may be sponsored as skilled workers by a relative, but 
they are assessed on the basis of the points system. Relatives who are 
not considered to be family class immigrants may be awarded five points 
towards the 67 points that they need in order to qualify for permanent 

IV. Provincial Nominees

    Most of Canada's provinces have programs designed to attract 
skilled workers. Provincial nominees receive preference in the 
processing of applications for immigrant visas. Because this category 
is generally small, it is not broken down into various types of 
provincial nominees.

V. Quebec-Sponsored Immigrants

    An agreement between the governments of Canada and Quebec gives the 
Province of Quebec responsibility for selecting skilled workers who 
intend to settle in that province. These applicants are not assessed on 
the Federal points system. Applicants selected by the province must 
pass medical, security, and criminal backgrounds checks conducted by 
the Federal Government. Once admitted to Canada, new residents are not 
required to remain in a province that sponsored them. A major concern 
of the Quebec Government is that many of the immigrants it has 
sponsored in recent years have moved to Ontario.

VI. Business Immigrants

    Canada admits three types of business immigrants: investors, 
entrepreneurs, and self-employed persons. Because investors must have a 
net worth of at least C$800,000 and must invest at least C$400,000 in 
Canada, they enjoy the highest priority. Entrepreneurs are in the 
middle category because they must have a net worth of at least 
C$300,000. Self-employed persons have the lowest preference in this 
category because they need only have the intent and ability to create 
their own employment.\7\ Business immigrants are not assessed on the 
points system.
    \7\ Citizenship and Immigration Canada, Who Qualifies as a Business 
Immigrant?, http://www.cic.gc.ca/english/business/ (last visited May 1, 

VII. International Adoptions

    The last group of applicants who are given preference for admission 
to Canada is children who have been approved for international 
adoption. Sponsors must prove that the adoption has been approved in 
the child's country of birth. Adopted children are not assessed on the 
basis of the points system.

VIII. Conclusion

    Canada's immigration system is quite complex because it gives many 
different types of preferences to persons in various categories as well 
as to persons within most of the six basic categories. The largest 
group of immigrants falls into the skilled worker class. Skilled 
workers are assessed on a points system that places great emphasis on 
education and work experience. The family class is narrower in Canada 
than it is in the United States. Preferences within this class are 
mostly administrative in nature. The third category that is broken down 
into preferences is business immigrants. In those cases, persons who 
are willing and able to invest at least C$400,000 in Canada are given 
the highest preference.

    (Prepared by Stephen F. Clarke Senior, Foreign Law Specialist, July 
                        Law Library of Congress
                 immigration policy for skilled workers
Executive Summary
    France is implementing a new immigration policy designed to attract 
the most qualified workers. They may apply for a skills and talents 
residency card, which is valid for 3 years and is renewable. The 
government, however, does not want this selected immigration policy to 
result in a ``brain drain'' from the workers' countries of origin, in 
particular, from African countries. Therefore, the card is limited to a 
one-time renewal for nationals from selected countries, who must 
participate during the card's validity period in a cooperative or 
economic investment project as defined between France and their country 
of origin.

I. Background

    In January 2006, Interior Minister Nicolas Sarkozy outlined a new 
policy on immigration.\1\ He called for a ``selected immigration 
policy'' designed to bring the most qualified migrants to France, 
noting that the current immigration policy was not linked enough to 
France's economic needs. To head off concerns over the brain drain 
which Africa, in particular, would suffer, if such a policy were 
implemented, the Minister explained that there were means to ensure 
that selected immigration be of mutual benefit to everyone. He stated 
that \2\:
    \1\ Voeux a la presse de Nicolas Sarkozy [Greetings to the press 
from Interior Minister Nicolas Sarkozy], http://www.interieur.gouv.fr
//rubriques/c/cl le ministre/cl3 discours/2006 01 12 voeux presse (last 
visited June 22, 2006).
    \2\ Id.

        In no way must this selected immigration policy result in a 
        brain drain from the countries of origin. Those whom we will 
        welcome will have to give back to their county of origin, in 
        some form or other, the benefits of the training and 
        professional experience they will gain in France. We will take 
        into account the needs of the country of origin when delivering 
        residency permits. This is a major difference from the policies 
        of some of our partners and I wish that France will take this 
        debate to European and international bodies. The development of 
        poor countries must remain a major objective.

    His ministry prepared a draft law containing, among others, 
measures facilitating the entry of skilled workers while ensuring, at 
the same time, that workers of selected countries will stay involved in 
the development of their countries of origin. The National Assembly 
adopted the immigration draft law with minor changes on May 17, 2006, 
while the Senate adopted a softer version on June 16. A commission met 
to reconcile the two versions.\3\ Both chambers adopted the reconciled 
version on June 30, 2006. Members of the parliamentary Socialist 
groups, however, challenged the constitutionality of some of its 
provisions. The provisions on entry of skilled workers, however, were 
not part of the challenge. The Law has been sent to the Constitutional 
Council for review. This Council examines the constitutionality of laws 
before they are promulgated.
    \3\ Assemblee Nationale, Draft Law on Immigration and Integration, 
integration.asp (last visited June 12, 2006).

II. Skills and Talents Residency Card

    The Law creates a new type of residency card, the skills and 
talents residency card. This card may be granted to ``a foreign 
national capable of participating, by his skills and talents, in a 
significant and lasting way, to the economic development or to the 
prestige of France and the country whose nationality he/she holds, 
notably in intellectual, cultural, humanitarian or sport domains.'' The 
card is granted for 3 years. It is renewable; its renewal, however, is 
limited to one time when the holder is a national of a member country 
of the priority solidarity zone.\4\
    \4\ Id. art. L.315-1.
    The French government set forth a priority solidarity zone in 1998. 
It comprises countries for which the government believes that 
development assistance may produce a significant effect and contribute 
to the sustainable development of the institutions, society and 
economy. The latest list of countries was prepared in February 2002.\5\ 
The Law further provides that the skills and talents residency card may 
only be granted to a national from a member country of the priority 
solidarity zone where such country has a co-development agreement with 
France or when the foreign national agrees to return to his country 
after a maximum period of 6 years spent in France.\6\
    \5\ The priority solidarity zone includes the following countries: 
Near East--Lebanon, Palestinian Territories and Yemen; North Africa--
Algeria, morocco, Tunisia; Sub-Saharan Africa and the Indian Ocean--
South Africa, Angola, Benin, Burkina-Faso, Burundi, Cameroon, Cape 
Verde, Central African Republic, Comoros, Congo, Cote d'Ivoire, 
Djibouti, Eritrea, Ethiopia, Gabon, Ghana, Gambia, Guinea, Guinea-
Bissau, Equatorial Guinea, Kenya, Liberia, Madagascar, Mali, 
Mauritania, Mozambique, Namibia, Niger, Nigeria, Uganda, Democratic 
Republic of Congo, Rwanda, Sao-tome and Principe, Senegal, Sierra-
Leone, Sudan, Chad, Togo and Zimbabwe.
    \6\ Assemblee Nationale, Draft Law on Immigration and Integration, 
supra note 3, art. L.315-1-1.
    The skills and talents residency card is granted based upon ``the 
content and the nature of the foreign national's project and of its 
interest for France and the country whose nationality she/he holds.'' 
\7\ A National Commission on Skills and Talents will set forth each 
year criteria to be taken into account to evaluate the above 
conditions.\8\ The Minister of Interior will issue the cards. The 
foreign national who lawfully resides in France will file a request 
with the competent local representative of the state while the foreign 
national who resides outside France will present it to the competent 
French consulate.\9\
    \7\ Id. art. L.315-2.
    \8\ Id.
    \9\ Id.
    The holder of a skills and talents residency card, who is a 
national of one of the countries of the priority solidarity zone, must 
participate during the validity period of his card in a cooperation or 
economic investment project defined between France and his country. 
Failure to respect this obligation will be considered when the card is 
up for renewal.\10\
    \10\ Id. art. L.315-3-1.

    (Prepared by Nicole Atwill, Senior Foreign Law Specialist, July 
                        Law Library of Congress
                              new zealand
             immigration points system for skilled workers
Executive Summary
    New Zealand maintains an immigration points system for the 
selection of independent skilled migrants. The objective of the skilled 
migrant visa is to provide New Zealand residency to persons with the 
transferable skills to fulfill identified needs within the New Zealand 
economy.\1\ Skilled migrants must meet minimum criteria of age, 
language skills, health and character and are then awarded ``points'' 
on the basis of qualifications, work experience, age, employment and 
familial relations in New Zealand.
    \1\ New Zealand Immigration Service Operational Manual Issued 24 
April 2006 available at http://www.immigration.govt.nz/nzis
//operations_manual/index.htm. para.SM1

I. Current Immigration Law

    New Zealand has a migration program that permits persons to migrate 
to New Zealand, or if currently living within New Zealand, to obtain 
permanent residence. Immigration New Zealand, part of the Department of 
Labour, administers New Zealand's migration programs.\2\ The principal 
pieces of legislation are the Immigration Act 1987 (NZ) and Immigration 
Regulations 1999 (NZ). New Zealand is currently undertaking a review of 
its immigration laws.\3\
    \2\ See Immigration New Zealand's Web site, http:// 
www.immigration.govt.nz (last visited July 12, 2006).
    \3\ See Department of Labour's Web site, http://www.dol.govt.nz
//actreview/ (last visited July 12, 2006).
    New Zealand's permanent migration program has three ``streams'': 
``Skilled/Business,'' ``Family Sponsored,'' and ``International
//Humanitarian.'' Under each stream there are a number of specific 
categories. The purpose of New Zealand's Skilled/Business stream is to 
``contribute to developing New Zealand's human capability base'' by 
accessing global skills and knowledge and attracting people to 
contribute to New Zealand's economy.\4\
    \4\ See http://www.immigration.govt.nz/nzopportunities/live
//skilledmigrant.htm (last visited July 12, 2006) and New Zealand 
Immigration Service, Guide for Working in New Zealand, NZIS 1016, 
November 2005, p. 3.
    A points system is used in the assessment of independent skilled 
migrants within the Skilled/Business stream. Skilled migrants, however, 
may also enter New Zealand under the Work to Residence policy as: 
sponsored employees of either an accredited employer or a non-
accredited employer in an in-demand occupation; sponsored talent in 
sports or the arts; or as investors/business persons.\5\ These 
categories provide for applicants to obtain permanent residence either 
immediately or after a specified period. Skilled migrants may also be 
eligible for a temporary work visa, where: their skill in demand in New 
Zealand; or the domestic labor market cannot fill a position; or they 
are required to work in New Zealand for specific events or periods of 
    \5\ See Talent (Accredited Employers), Talent (Arts, Culture and 
Sports); or Long Term Skill Shortage List visas. See New Zealand 
Immigration Service, Guide for Working in New Zealand, NZIS 1016, 
November 2005.
    \6\ New Zealand Immigration Service, Guide for Working in New 
Zealand, NZIS 1016, November 2005.

II. Skilled Migration Numbers

    In 2005-06 New Zealand's skilled/business migration program 
approved 11,703 applications resulting in 30,813 people. In addition, 
26,286 people entered via the Skilled Migration (independent migration) 
and 1,352 people via the General Skills and Work to Residence programs 
(employer-sponsored migration).\7\
    \7\ Immigration New Zealand statistics, http:/
(last visited July 12, 2006).

III. Skilled Migration--Points System

    Under New Zealand's points system, applicants for the skilled 
migration category must fulfill certain criteria (aged under 55 years, 
be of good health and character and have a reasonable standard of 
English) and score above a minimum points threshold before they may 
submit an Expression of Interest (EOI) to live and work (residency) in 
New Zealand.\8\ Attachment 1 provides an overview of the basis on which 
points are issued.
    \8\ Immigration New Zealand website, hthy./
//howdoiapply/theprocess/default.htm (last visited July 12, 2006).
    EOIs are ranked and those that meet the current Selection Point are 
invited to apply for residency in New Zealand. The Selection Point is 
the number above the minimum threshold above which EOIs will be 
selected. It is determined fortnightly. Currently the Selection Point 
is 140 points; therefore, applicants who score above 140 points will be 
invited to apply for residency. If there are places remaining in New 
Zealand's immigration program, those EOIs that score between 100 and 
140 and have a New Zealand job or job offer may be invited to apply for 
residency. If places are still available after the selection of those 
with employment or offers of employment, then EOIs may be selected on 
other criteria decided by the Minister for Immigration. Currently these 
criteria place the EOIs into ranked categories (in descending order) on 
number of points the applicants has for work experience in an area of 
absolute skills shortage or qualifications in an area of absolute 
skills shortage and then, within each category, the EOIs are placed in 
descending order of their total points.\9\
    \9\ Immigration New Zealand, Summary of Terms for Additional 
Selection Criteria, http://glossary.immigration.govt.nz
//additionalselectioncriteria.htm (last visited July 12, 2006).
    If an applicant's EOI is not selected, it will remain in the 
``pool'' for 6 months before being deleted. If no EOIs are selected 
from the pool in the previous 6 months then all applications will be 
retained in the pool. Applicants whose EOIs are not selected may submit 
another EOI.
    Once applicants' EOIs are selected, they will be invited to apply 
for residency (and thus be required to submit documents to support any 
claims made in their EOI) and their EOI and application will be 
assessed by the Department of Immigration against government policy and 
to verify the information provided. From this assessment an application 
may be declined or an applicant may be offered a permanent residence 
visa or a temporary visa to enter and remain in New Zealand while 
looking for work.

    (Prepared by Lisa White, Foreign Law Specialist, July 2006.)

Attachment 1

    Under the New Zealand ``points system,'' points are awarded as 

                 Criterion                      Qualification/Points
Skilled employment........................  Current on-going NZ
                                             employment for 12 months or
                                            Offer of employment or
                                             current employment (more
                                             than 3 months but less than
                                             12 months)------------------
Bonus points for employment or offer of     Region outside
 employment in future growth area,           Auckland-------------------
 identified cluster or area of absolute      -------10
 skills shortage.                           Spouse/partner offer of
Relevant work experience in comparable      2 yrs------------------------
 labor market.                               10
                                            4 yrs------------------------
                                            6 yrs------------------------
                                            8 yrs------------------------
                                            10 yrs-----------------------
Bonus points for work in NZ...............  2
                                            4 yrs------------------------
                                            6 yrs or more----------------
Bonus points for work experience in an      2-5yrs----------------------
 identified future growth area, identified   -5
 cluster or area of absolute skills         6 yrs or more----------------
 shortage.                                   --10
Bonus points if applicant's occupation is   Relevant qualifications/work
 on Long Term Skills Shortage List.          experience-----------------
                                            Offer of skilled
Qualifications............................  Basic (trade, diploma,
                                            Post-graduate (masters or
Bonus points for qualifications...........  NZ qualifications (at least
                                             2 years of study)-----------
                                            Qualifications in future
                                             growth area, identified
                                             cluster or area of absolute
Age (must be between 20 and 55 yrs).......  20-29-----------------------
Close ties in NZ (eg. adult siblings,       ----------------------------
 children or parents).                       -10

                        Law Library of Congress
             immigration points system for skilled workers
Executive Summary
    Singapore has an open policy toward skilled migration and a 
rotational/temporary program for unskilled workers. Highly skilled 
workers are granted an Employment Pass and are not assessed via a 
``points system,'' however middle management and technical workers are 
granted an S Pass and are assessed via a points system. Points are 
awarded on the basis of salary, education, experience and occupation. 
Generally, an employer applies for an S Pass on behalf of a prospective 

I. Current Immigration Law

    The Republic of Singapore (Singapore) has an open immigration 
policy toward skilled and business migration and a guest worker program 
intended for unskilled and semi-skilled workers. Singapore does not 
undertake humanitarian migration. The primary pieces of legislation are 
the Immigration Act (CAP 133) and the Employment of Foreign Workers Act 
(CAP 91A). All work visas are issued and controlled by the Ministry of 
Manpower \1\; however, other visas and registration of citizenship and 
permanent residency, as well as border control, are managed by the 
Immigration and Checkpoints Authority under the Ministry of Home 
    \1\ See Ministry of Manpower--http://www.mom.gov.sg (last visited 
July 12, 2006).
    \2\ See Immigration and Checkpoint Authority--http:/
//app.ica.gov.sg/about_ica/about_ica.asp (last visited July 12, 2006).
    In general all foreigners who wish to engage in business or 
employment in Singapore must have a valid ``visa'' (or work permit).\3\ 
Employers of foreign workers must pay a levy in relation to each worker 
and, in relation to some employees, must comply with quotas and lodge 
security bonds.
    \3\ Immigration Act CAP 133 Sec. 6(1).
    There are three main types of work visas \4\:
    \4\ It should be noted that there are also Short Term Employment 
Passes that permit employees with acceptable professional/tertiary 
qualifications, earning more than SGD$2,500 per month, to enter 
Singapore and undertake work on a specific project or assignment. This 
pass is non-renewable. There are also visas for training employees in 
Singapore and for entrepreneurs.

     Employment Pass--P Pass/Q1 Pass for professional or 
managerial workers with a monthly salary of above SGD$2,500. Assessment 
via salary and professional qualifications or specialist skills in a 
professional, administrative, executive or managerial capacity;
     S Pass--for skilled technicians or middle-level managers 
workers with a monthly salary of above SGD$1,800. Assessed on a 
``points system'' (salary, education, experience and job type);
     Work Permit--for semi-skilled or unskilled workers with a 
monthly salary of no more than SGD$1,800 (includes domestic workers) 
(restrictions on nationality of applicants).
    Only the S Pass is assessed via a ``points system.''

II. Skilled Migration Numbers

    Singapore does not release details of the number of visas issued 
each year.\5\ Population statistics released by the Singaporean 
government indicate that of the total population of 4,351,400, 
permanent residents or citizens numbered 3,553,500. Therefore 797,900 
are non-residents; this figure includes temporary workers, student visa 
holders and long-term non-work visa holders.\6\
    \5\ E-mail to author from Senior Public & Internal Communications 
Executive Corporate Communications Division, Immigration & Checkpoints 
Authority, Singapore Government, June 13, 2006.
    \6\ Definition of non-resident population as used in census 
collection ``Non-resident population are those who are non-citizens and 
non-permanent residents of Singapore, such as employment pass holders, 
work permit holders, student pass holders, dependent pass holders and 
long-term social visit pass holders'' see http://www.singstat.govsg
//keystats/glossary/cglossary.html (last visited July 12, 2006).

III. Skilled Migration--Points System

    S Pass applications are assessed on a points system over four main 
categories: salary, educational qualifications, years of relevant work 
experience and job type (such as specialized workers and technicians). 
The Ministry of Manpower assesses each application against the S Pass 
    \7\ It is possible to submit an application even if a worker does 
not appear to meet all the relevant criteria as each application will 
be assessed on its own merits. See Ministry of Manpower--Employment/S 
Pass Frequently Asked Questions--Can companies with Work Permit holders 
who (nearly)/ meet the S Pass criteria apply for S Pass?, http:/
//www.mom.gov.sg/FAQs/SPass/ForEmployees/CriteriaforSpass.htm (last 
visited July 12, 2006).
    Salary is also a threshold criterion because to qualify for an S 
Pass an applicant must be paid a minimum monthly basic salary of 
SGD1,800. S pass holders who earn a minimum monthly basic salary of 
more than SGP2,500 are permitted to bring their immediate families to 
    \8\ Ministry of Manpower--S Pass Policy Brief. See http:/
//www.mom.gov.sg/ProceduresAndGuidelines/SPass/PolicyBrief.htm (last 
visited July 12, 2006).
    Singapore does not publish detailed descriptions of its assessment 
process but states that the applicants accumulate points depending on 
how well they meet the criteria. Singapore provides the following 
descriptions for illustrative purposes: ``basic salary'' is a standard 
component of income that allows for comparison of income across all 
sectors and industries; ``qualifications'' refers to degree or diploma-
level education (but may extend to technical qualifications) and 
generally should involve at least 1 year of full-time study; ``job 
type'' is identified as professional, specialist or technician-level 
jobs; and ``work experience'' refers to the number of relevant work 
    \9\ Ministry of Manpower--Employment/S Pass--Frequently Asked 
Questions as of July 11 2006, available at http://www.mom.gov.sg/FAQs
    An example provided by the Ministry of Manpower of a successful S 
Pass application is \10\:
    \10\ Id.
    1. Assistant electronic engineer with a monthly salary of SGD1800 
and technical qualifications (i.e. the technician has been trained in 
his or her chosen field, and the training was for at least 1 year of 
full-time study) and 6 years of work experience.
    An example provided by the Ministry of Manpower of an unsuccessful 
S Pass application is:
    2. Hotel Receptionist with monthly salary of SGD2000, 6 years work 
experience and technical qualifications.

    (Prepared by Lisa White, Foreign Law Specialist, July 2006.)
                        Law Library of Congress
                             United Kingdom
             immigration points system for skilled workers
Executive Summary
    The highly skilled migrant programme in the UK provides for a 
points based system. The programme provides a method for applicants 
that meet the required number of points to remain and work in the UK 
without a work permit and, ultimately, a path to permanent residency. 
The programme is thought to provide the most dramatic development in 
immigration law for 30 years.

I. Introduction

    The law governing, and policy surrounding, immigration in the UK is 
highly complex, with the government attempting to balance the needs of 
genuine visitors and the contributions they make to the economy of the 
UK to those that wish to enter the UK for undesirable purposes. The 
government has recently shifted to a policy of managed migration ``in 
the interests of the economy'' \1\ in which the skills and benefits 
that migrants bring to the country are emphasized, with particular 
support for skilled workers \2\ and quotas for those without skills, 
where there is a need in the UK.\3\
    \2\ Id.
DIVERSITY, 2002, Cm. 5387.
    The statutory regime governing immigration in the UK is now 
contained in the Immigration Act 1971 \4\ and the Immigration Rules \5\ 
made under it. The law requires that individuals who are not British or 
Commonwealth citizens with the right of abode in the UK, nor members of 
the European Economic Area,\6\ obtain leave to enter the UK from an 
immigration officer upon their arrival.\7\
    \4\ Immigration Act 1971, c. 77.
    \5\ Immigration Rules, H.C. 395, (as amended). R v Chief 
Immigration Officer, Heathrow Airport, ex. p. Salamat Bibi [1976] 3 All 
ER 843 (CA) per Roskill, LI : ``these rules are [not administrative 
practice and are] just as much delegated legislation as any other form 
of rule making activity . . . which is empowered by an Act of 
Parliament. Furthermore, these rules are subject to a negative 
resolution and it is unheard of that something which is no more than an 
administrative circular stating what the Home Office considers to be 
good administrative practice should be subject to a negative resolution 
by both Houses of Parliament. These rules, to my mind, are just as much 
a part of the law of England as the 1971 Act itself.
    \6\ The European Economic Area consists of the Members of the 
European Union, plus Norway, Iceland and Liechtenstein.
    \7\ Immigration Act 1971, c. 77, Sec. 3 and the Immigration Rules, 
H.C. 395, para. 7.

II. Highly Skilled Migrant Programme

    The highly skilled migrant programme has been cited as ``the most 
dramatic development in commercial immigration law for the past 30 
years and has made many of the other commercial immigration categories 
effectively redundant.\8\ The highly skilled migrant programme enables 
individuals to enter the UK without the need for a work permit; without 
a business plan; to create jobs; invest money in the UK; or with a 
specific job offer.\9\ It is designed to ``allow highly skilled 
individuals with exceptional personal skills and experience to come to 
the United Kingdom to seek work or self-employment opportunities.'' 
eds., 6th ed 2003), para. 10.77.
    \9\ Immigration Rules, H.C. 395 para. 135, at http:/
//www.ind.homeoffice.gov.uk/lawandpolicy/immigrationrules/part5 (last 
visited June 15, 2006).
    \10\ Immigration Directorates Instructions, c. 5, Sec. 11.
    Individuals that apply under the scheme must show that they have 
the appropriate documentation issued by the Secretary of State to enter 
the UK under the HSMP; have appropriate entry clearance; intend to make 
the UK their main home; and be able to accommodate and maintain 
themselves and any dependents without recourse to public funds.\11\
    \11\ Immigration Rules, H.C. 395 para. 135, at http:/
//www.ind.homeofce.gov.uk/lawandpolicy/immigrationrules/part5 (last 
visited June 15, 2006).

III. The Use of Points

    The HMSP is operated on a points basis, with a score of 65 or more 
qualifying the applicant as a highly skilled migrant. The points are 
awarded in five main areas:
     educational qualifications;
     work experience;
     past earnings--the amount of points awarded for past 
earning are in three different bands that adjust for four different 
groups of countries, which are coded A-E.\12\ The county list ``has 
been designed in consultation with the Treasury and an external 
consultant and is based on World Bank data of Gross Domestic Product 
(GDP) per capita'' \13\;
    \12\ A full list of the countries and their appropriate codes is 
provided for in the Immigration Directorates Instructions, c. 5, 
Sec. 11, Annex Z3, http://www.ind.homeoffice.gov.uk/documents
//idischapter5annexes/sectionl l/annexz3.pdf?view=Binary (last visited 
July 12, 2006).
    \13\ A list of the current 50 top business schools is provided for 
in the Immigration Directorates Instructions, c. 5, Sec. 11, Annex Z8.
     achievements in the applicant's field--achievements 
include such things as published work, scholarships, and industry 
prices; and
     achievements of the applicant's married or unmarried 
partner (this includes same-sex partners)--there is a 10 point 
allowance for applicants whose partners have a degree (or equivalent) 
qualification or are currently employed in a graduate level job.\14\
    \14\ Guidance to caseworkers is provided online: Immigration 
Directorates Instructions, c. 5, Sec. 11, Annex Z1, http:/
//www.ind.homeoffice.gov.uk/documents/idischapter5annexes/sectionl l
//annexzl.pdf?view=Binary (last visited July 13, 2006).
    Individuals under the age of 28 at the time of application are 
awarded an additional five points and are awarded more points for 
lesser experiences than those over the age of 28.
    In 2005, the government introduced a new provision enabling 
individuals with a Masters Degree in Business Administration from one 
of the 50 top business schools, as designated by HM Treasury,\15\ the 
ability to ``meet the points criteria on the basis of their MBA 
alone.\16\ Thus, individuals that have graduated from one of the 
eligible business schools with an MBA are automatically awarded the 65 
points that are needed to qualify under the HSMP. The aim of the 
inclusion of this provision is to ``attract highly qualified and 
talented managers to the UK'' \17\ to address a ``weakness in the UK 
economy in the quality of management.\18\
    \15\ A list of the current 50 top business schools is provided for 
in the Immigration Directorates Instructions, c. 5, Sec. 11, Annex Z8.
    \16\ Immigration Directorates Instructions, c. 5, Sec. 11.
    \17\ Immigration Directorates Instructions, c. 5, Sec. 11.
    \18\ Immigration Directorates Instructions, c. 5, Sec. 11, Annex 
    The table below provides an overview of the points awarded in the 
various categories for the different age groups:

            Criteria                Under 28 Years       Over 28 Years
Educational Qualifications......  Ph.D.: 30 points;   Ph.D.: 30 points;
                                   master's degree     master's degree
                                   25 points;          25 points;
                                   bachelor's degree   bachelor's degree
                                   15 points.          15 points.
Work Experience.................  25 points for 2     25 points for 5
                                   years of full-      years of full-
                                   time graduate       time graduate
                                   level experience;   level experience
                                   35 points for 4     or Ph.D. and 3
                                   years of full-      years of graduate
                                   time graduate       level experience;
                                   level experience;   35 points for
                                   or 50 points for    criteria as
                                   4 years of full-    above, but
                                   time graduate       including 2 years
                                   level experience    or more
                                   with at least 1     experience at a
                                   of these years      specialist or
                                   served at a         senior level; 50
                                   senior or           points for 10
                                   specialist role.    years of full-
                                                       time graduate
                                                       level experience;
                                                       or 50 points for
                                                       4 years of full-
                                                       time graduate
                                                       level experience
                                                       with at least 5
                                                       of these years at
                                                       a senior or
                                                       specialist role.
Past Earnings...................  The lowest income   The lowest income
                                   on the band is      on the band is
                                   2,350   3,500
                                   (approximately      (approximately
                                   $4,100) for         $6,100) for
                                   country code E      country code E
                                   (includes           (includes
                                   countries such as   countries such as
                                   Ghana) and the      Ghana) and the
                                   highest is 60,000        pound>250,000
                                   (approximately      (approximately
                                   $105,000) for       $437,500) for
                                   country code A      country code A
                                   (includes           (includes
                                   countries such as   countries such as
                                   the United          the United
                                   States).            States).
                                   Applicants with     Applicants with
                                   income in band 1    income in band 1
                                   are awarded 25      are awarded 25
                                   points; those in    points; those in
                                   band 2 are          band 2 are
                                   awarded 35 points   awarded 35 points
                                   and those in band   and those in band
                                   3, 50 points.       3, 50 points.
Achievements by the Applicant's   15 points awarded   15 points awarded
 Field.                            to those with       to those with
                                   significant         significant
                                   achievements; 25    achievements; 25
                                   points awarded to   points awarded to
                                   those with          those with
                                   exceptional         exceptional
                                   achievements.       achievements.
Achievements in the Applicant's   10 points.........  10 points
MBA.............................  65 Points.........  65 Points
General Practitioners with        50 points.........  50 points
 British General Medical Council
 certification and one other
 approved qualification..

    Individuals entering the UK under this programme may remain for up 
to 2 years. This period can be renewed for an additional 3 years, 
subject to certain requirements, such as the applicant having taken all 
reasonable steps to become economically active during his time in the 
UK. The renewal then enables the worker ultimately to apply for 
permanent residency in the UK after legally residing there for a 
continuous period of 5 years.\19\
    \19\ Home Office, Working in the UK: Work Permits, http:/
//workjermits.html (last visited Feb. 15, 2006).

    (Prepared by Clare Feikert, Foreign Law Specialist, July 2006.)
    Prepared Statement of Katharine M. Donato*, Douglas S. Massey, 
                           and Brandon Wagner
    A major shortcoming of most prior research on services and taxes is 
the inability to disaggregate findings by legal status. Data from the 
Census and Current Population Survey only distinguish between citizens 
and other foreigners, and very few datasets contain information 
sufficient to identify undocumented migrants with any reliability. The 
one exception is the Mexican Migration Project, which has compiled 
information on taxes paid and services used by Mexican migrants in all 
legal statuses for more than two decades. In this paper, we use these 
data to shed light on the patterns and determinants of service use and 
tax payment among the largest immigrant population in the United 
States. Our findings illustrate that rates of service usage have 
dropped since 1986, at the same time that rates of tax payment and 
health insurance coverage have risen. The net effect of these two 
countervailing trends, we argue, has been a sharp decline in the use of 
unreimbursed services by Mexican migrants to the United States.
    This paper was prepared for presentation at the 2006 annual meeting 
of the Population Association of America in Los Angeles. We gratefully 
acknowledge generous support from NICHD, the William and Flora Hewlett 
Foundation, and the Mellon Foundation.
    * For more information, please contact Katharine M. Donato, 
Associate Professor, Rice University, 6100 Main Street, Houston TX 
77005, [email protected]
     The Chilling Effect: Public Service Usage by Mexican Migrants 
                          to the United States
    Two trends have coincided during the 1960s and 1970s: expansion of 
the U.S. welfare State and the resurgence of mass immigration from poor 
countries. The salience and simultaneity led some to wonder whether 
immigrants were arriving to take advantage of generous social services 
offered by the United States, and whether citizen taxpayers were 
somehow paying for these services. By the end of the century, this 
topic--the cost of public services consumed by immigrants--has led to 
controversy and debate about two questions. First, to what extent do 
undocumented migrants in the United States use publicly provided 
services? And second, to what degree are the public services they 
consume offset by immigrant-generated tax revenues?
    Although prior studies have considered the first question, this 
work has been more speculative than analytic because reliable data on 
undocumented migrants are scarce. One early review of existing studies 
largely based on small convenience samples found that authorized 
migrants rarely drew upon means-tested services such as welfare, food 
stamps, or supplemental security income (Massey and Schnabel 1983). 
When undocumented migrants did make use of U.S. educational and medical 
services at higher rates, their usage was lower than one would predict 
given their socioeconomic characteristics (Massey et al. 1987).
    Studies of service use by documented immigrants have relied on 
census data on the foreign born. Although foreigners enumerated in the 
census include a significant number of undocumented migrants and 
legally resident nonimmigrants, census data are tacitly assumed to 
refer only to legal immigrants and citizens. This assumption, however, 
has become increasingly problematic because of the growing settlement 
of undocumented migrants and the increasing entry of legal temporary 
workers (see Massey and Bartley 2005).
    Some early work based upon the 1980 census suggested that the 
foreign born were less likely than natives to use publicly provided 
services, controlling for their demographic, social, and economic 
characteristics (Tienda and Jensen 1986; Jensen and Tienda 1988). 
However, using 1970-1990 data, Borjas and colleagues found that welfare 
use increased with time spent in the United States and that recently 
arrived immigrants used social services at significantly higher rates 
than earlier arrivals (Borjas and Trejo 1991; Borjas 1995). Borjas and 
Trejo (1993) also found that much of the change in welfare usage was 
driven by the shift in immigrant origins toward nations that sent large 
number of refugees, such as Russia, Cuba, Vietnam, and Cambodia. In 
contrast to immigrants admitted for family reunification or employment 
reasons, refugees generally display higher rates of social service 
    Although service consumption by immigrants has been a topic of 
public discussion since the 1960s, the issue gained considerable 
traction during the early 1990s. In the context of a severe economic 
recession, the use of public services by foreigners became an explosive 
issue, especially in California, the largest immigrant-receiving State 
and one of the States hit hardest by the post-cold war recession. In 
1993, anti-immigrant activists succeeded in placing on the ballot 
Proposition 187, also known as the ``Save Our State'' (i.e. SOS) 
initiative. Passed by a wide margin, the proposition banned 
undocumented migrants from receiving all publicly provided services 
except emergency medical care. Although Federal courts struck down most 
of its provisions as unconstitutional, Proposition 187 nonetheless 
served as a potent vehicle for conservative political mobilization and 
fed directly into the emerging debate on welfare reform.
    As the 1990s progressed, many continued to publish studies 
documenting inter-cohort increases in welfare use and to publicize the 
results in popular outlets (Borjas 1996; Borjas and Hilton 1996). In 
one particularly provocative paper, Borjas (1999) argued that once in 
the United States, immigrants were drawn to States that offered the 
highest welfare benefits. He estimated a model showing that, other 
things equal, immigrants on welfare were more concentrated in high-
benefit States than those who were not on welfare and coined the term 
``welfare magnets'' to describe high-benefit States. Although Massey 
and Espinosa (1997) have shown that welfare was not a significant force 
in attracting immigrants in the first place, the term stuck and 
resonated with the public.
    The wave of concern about immigration and welfare crested in 1996 
with the passage of two pieces of reform legislation. The Illegal 
Immigration Reform and Immigrant Responsibility Act (usually called the 
1996 Immigration Reform Act) declared undocumented migrants ineligible 
to receive social security benefits and limited their eligibility for 
educational benefits, even if they had paid the requisite taxes; it 
also gave authority to States to limit public assistance to all foreign 
nationals, whether legal or illegal. The Personal Responsibility and 
Work Opportunity Reconciliation Act also contained provisions with far-
reaching effects on immigration. Known as the 1996 Welfare Reform Act, 
it barred illegal migrants from most Federal, State, and local public 
entitlement programs and required Federal verification of the 
immigration status of all foreign nationals before they could receive 
any Federal benefit. It also placed new restrictions on legal immigrant 
access to public services, barring them from receiving food stamps or 
supplemental security income, and prohibiting them from using any 
means-tested program for 5 years after admission. The Welfare Reform 
Act also gave States greater flexibility in setting eligibility rules 
for legal immigrants, and gave them the statutory authority to exclude 
them entirely from Federal and State programs.
    Together these two pieces of legislation accomplished nationally 
what Proposition 187 was unable to do in California--it definitively 
barred undocumented migrants from social security coverage and means-
tested programs. But Federal lawmakers went further than Proposition 
187 by drastically reducing the access of legal immigrants to public 
programs. The end result was a ``chilling effect'' on the use of social 
services by all immigrants (Fix and Zimmerman 2004). Throughout the 
United States rates of welfare and other entitlement use by foreigners 
fell sharply. In most regions of the country the drop paralleled a 
similar decline among natives, but in California the decline among 
immigrants was much steeper (Zimmerman and Fix 1998; Borjas 2002), even 
for services to which they were legally entitled. Therefore, by the 
turn of the century, rates of immigrant welfare use had fallen to 
historically low levels.
    Determining the net balance between public funds expended on behalf 
of immigrants and tax revenues generated by them is a tricky exercise 
in statistical modeling that involves many assumptions and educated 
guesses. The most comprehensive analysis of the net fiscal effect of 
immigration was undertaken by the National Research Council (NRC) (see 
Smith and Edmonston 1997). It concluded that although immigrants 
produced a net fiscal gain for Federal coffers, they constitute a net 
loss for State and local governments. Drawing on research by Clark 
(1994), Vernez and McCarthy (1995), and Espenshade and colleagues 
(Rothman and Espenshade 1992; Garvey and Espenshade 1996) as well as 
its own calculations, the NRC figured that under current conditions, 
the cost of admitting an immigrant was around $10 per year for each 
native household in New Jersey and around $45 in California.
    In sum, a major shortcoming of most prior research on services and 
taxes is the inability to disaggregate findings by legal status. Data 
from the Census and Current Population Survey only distinguish between 
citizens and other foreigners, which consist of legal permanent 
residents, undocumented migrants, and foreigners living in the United 
States with temporary, nonresident visas (Massey and Bartley 2005). 
Very few datasets contain information sufficient to identify 
undocumented migrants with any reliability. The one exception is the 
Mexican Migration Project, which has compiled information on taxes paid 
and services used by Mexican migrants in all legal statuses for more 
than two decades. In this paper, we use these data to shed light on the 
patterns and determinants of service use and tax payment among the 
largest immigrant population in the United States.
                           data and measures
    The Mexican Migration Project (MMP) began in 1982 and, since 1987, 
it has annually surveyed communities throughout Mexico to build a 
comprehensive data base on documented and undocumented migration to the 
United States. Its procedures and the resulting data sets have been 
exhaustively described in numerous publications (see Massey 1987; 
Massey and Zenteno 2000; Massey and Capoferro 2004; Durand and Massey 
2004). Each year 4-6 communities ranging in size from small villages to 
neighborhoods in large metropolitan areas are selected and randomly 
surveyed. A semi-structured interview known as the ethnosurvey is 
applied to gather social, demographic, and economic information about 
each household and its members. A special module collects information 
on the first and last U.S. trips made by each household member, and all 
household heads and spouses are administered a retrospective 
questionnaire that compiles a complete history of migration from age 15 
(or age of entry into the labor force) onward. Heads are also asked a 
detailed battery of questions about their last trip to the United 
States, including specific queries about service usage and tax payment. 
Copies of the MMP questionnaire, a description of the sample, and all 
data files are available from the project Web site at http:/
    Each Mexican community survey is followed a few months later by a 
survey of out-migrants originating in that community who have settled 
in the United States and no longer return home regularly to be 
interviewed south of the border. These respondents are located using 
snowball or chain-referral sampling methods. Data from surveys on both 
sides of the border are then cleaned, coded, and assembled into 
composite files that have been shown to be remarkably representative of 
the bi-national migrant community formed by recurrent migration and 
settlement (Massey and Zenteno 2000). As of the present writing, this 
data set includes 93 Mexican communities containing 16,000 households 
and more than 80,000 individuals.
    Although the MMP has tried to achieve consistency in measurement 
over time, some changes have been introduced into questions on service 
usage. Prior to 1998 (or the first 52 communities), questions on 
service usage asked whether food stamps, unemployment insurance, or 
welfare payments were ever received ``over the length of your 
experience of life or work in the United States.'' Beginning in 1998, 
however, the question was re-worded to refer to services consumed ``on 
the last trip or most recent visit to the United States.'' In addition, 
the new question added specific queries about use of the nutritional 
supplement program for women, infants, and children (WIC); Supplemental 
Security Income program for the disabled and impoverished elders (SSI); 
general assistance provided by individual States; Temporary Assistance 
to Needy Families (TANF) program that replaced Aid to Families with 
Dependent Children after the Welfare Reform Act was implemented in 
1996; and Medicaid, the Federal health subsidy program serving the 
uninsured poor. Other new questions on contributions were also added in 
1998, including whether respondents filed a tax return and held a U.S. 
credit card.
    Aside from these additions, there was an important shift in the 
reference period of the question wording from lifetime use to 
consumption on the last U.S. trip. For migrants with only one trip, the 
resulting data are equivalent. But for those with multiple trips, the 
meaning of these data depends on whether the service usage question was 
asked before or after 1998. Therefore, to ensure comparability, we 
exclude migrants with multiple trips from data collected in 1997 or 
before. This permits us to gain comparability over time, even though we 
sacrifice interesting information on lifetime patterns of service usage 
by migrants with extensive U.S. experience. All subsequent analyses 
thus refer to the services used and contributions made at the time of 
the migrant's most recent U.S. trip. For interviews completed before 
1998, it is also their first trip.
             service use and contributions by legal status
    Table 1 shows contributions and consumption by Mexican migrants to 
the United States in three legal status groups: citizens and legal 
permanent residents, who we call documented migrants; persons who 
entered the country without inspection or entered legally but violated 
the terms of their visa, who we call undocumented migrants; and those 
who entered on a legitimate nonresident visa (e.g. tourist or temporary 
worker) but did not violate its terms, who we call temporary migrants. 
We divide the services consumed by immigrants into two categories--
those that are unrestricted entitlements accessible to anyone in the 
United States irrespective of legal status, and those that involve some 
sort of legal test or administrative filter to confirm eligibility. 
According to Federal court decisions, the only unrestricted services 
are public education and medical care. Since 1996, most other services 
entail some sort of restriction or eligibility check.

Table 1.--Social Service Usage and Societal Contributions Reported by Mexican Migrants on Their Last Trip to the
                                          United States by Legal Status
                                                                      Citizen                Temporary
                       Usage or Contributions                        or Legal  Undocumented   Visitor     Total
                                                                     Resident                or Worker
Unrestricted Services:
  School...........................................................      34.6        10.6          6.4      17.1
  Doctor...........................................................      65.2        32.8         23.9      40.2
  Hospital.........................................................      57.1        25.7         17.2      33.6
Restricted Services:
  Food Stamps......................................................      10.7         4.0          2.1       5.7
  Welfare..........................................................       7.8         3.1          2.1       4.3
  Unemployment.....................................................      27.8         4.0          3.0      11.0
  TANF*............................................................       1.5         0.6          0.3       0.7
  WIC*.............................................................       9.8         4.1          1.3       4.6
  SSI*.............................................................       0.4         0.6          0.3       0.5
  General Assistance*..............................................       1.8         0.2          0.0       0.0
  Medicaid.........................................................       5.2         9.3          4.9       7.0
Societal Contributions:
  Social Security Tax..............................................      89.0        66.2         64.3      72.8
  Federal Income Tax...............................................      87.6        62.8         60.3      70.0
  Pays for Health Care.............................................      67.1        49.8         39.0      56.3
  Has Health Insurance.............................................       4.7         3.3          4.0       4.0
Societal Connections:
  Has U.S. Bank Account............................................      35.3         7.0          5.3      15.1
  Submit U.S. Tax Return*..........................................      59.0         9.3         12.6      19.2
  Has U.S. Credit Card.............................................      24.2         3.3          5.4       7.6
Number of Migrants.................................................     1,188       2,101          701     3,990
* Question only asked after 1996.

    We also divide immigrant contributions into two categories. The 
first category includes direct financial contributions to offset the 
cost of providing public services, namely taxes withheld and health 
contributions made either through personal funds or in the form of 
insurance payments. The second are more general indicators of 
connections or contributions to U.S. society, such as filing a tax 
return, having a bank account, and possessing a credit card. These 
indicate the degree to which a migrant is integrated into the American 
economy. Filing a tax return is particularly crucial in assessing the 
cost of services because not submitting a return precludes the 
possibility of receiving any kind of refund. Unless a return is filed, 
taxes paid represent a permanent contribution to government ledgers.
    The top panel of the table reports usage rates for unrestricted 
services to which immigrants have a basic human right as U.S. 
residents. Since people inevitably get sick and suffer mishaps and 
accidents, it is not surprising that the highest use levels are 
observed for medical services. Overall, 40 percent of Mexican migrant 
household heads reported seeing a doctor in the United States and one-
third said they had visited a hospital. In contrast, just 17 percent of 
migrants reported sending children to U.S. schools.
    Despite the presumed universality of the right to education and 
health in the United States, we nonetheless observe large differentials 
by legal status, with rates of usage among documented migrants being 2-
3 times those of the undocumented. Thus, whereas 65 percent of citizens 
and legal residents reported seeing a doctor and 57 percent visited a 
hospital, the figures were only 33 percent and 26 percent among those 
in unauthorized status. Likewise, whereas 35 percent of documented 
migrants sent children to U.S. public schools, only 11 percent of 
undocumented migrants did so. Service rates were lowest among temporary 
migrants. Just 24 percent said they had seen a doctor, 17 percent had 
visited a hospital, and 6 percent had used U.S. schools on their last 
trip to the United States.
    Given the large usage differentials by legal status for 
unrestricted services, we expect to uncover even larger differentials 
for those that are restricted. The second panel of Table 1 suggests 
that this is generally the case. Among restricted services, the highest 
usage rates are observed for unemployment compensation, with 28 percent 
of citizens and legal residents reporting usage on the last trip. Among 
undocumented migrants, however, the usage rate was just 4 percent, 
compared with 3 percent for temporary migrants. Moreover, usage rates 
for welfare and food stamps are low even among citizens and legal 
resident aliens. Only 11 percent said they used food stamps on their 
last trip and just 8 percent said they had been on welfare. For 
undocumented and temporary legal migrants, usage rates never exceed 4 
    Questions about the use of specific public services--TANF, WIC, 
Medicaid, and general assistance--were only included after 1997. The 
WIC food supplement program for pregnant women and infants displayed 
the highest rate of usage at around 10 percent for documented migrants, 
4 percent for persons in unauthorized status, and just 1 percent among 
temporary migrants. Medicaid--the federally subsidized health 
assistance program for the poor--was the only program where usage rates 
were higher for undocumented than documented migrants, being 9 percent 
for the former and 5 percent for the latter, compared with 5 percent 
for temporary migrants. Rates for the use of the current welfare 
program (TANF), supplemental security income (SSI), and general 
assistance were generally minuscule, even among legal immigrants and 
citizens, much less among undocumented and temporary migrants.
    However, when it comes to the financial contributions to public 
ledgers, rates of immigrant participation are much higher and 
differentials by legal status are muted. Thus, 89 percent of documented 
migrants reported having social security taxes withheld from their pay, 
and 88 percent reported withholding of income taxes. Although the 
percentages were smaller for undocumented migrants, they were still 
rather robust at 66 percent for social security taxes and 63 percent 
for income taxes, and for temporary migrants at 64 percent and 60 
percent. Among the 820 documented migrants who reported using a doctor 
or hospital in the United States, 67 percent reported paying the bill 
themselves and 5 percent said it was covered by private health 
insurance. Among undocumented the 772 migrants using medical services, 
the respective figures were 50 percent and 3 percent, compared with 39 
percent and 4 percent among 190 temporary migrants.
    Although we do not have precise information on the amounts 
withheld, these relatively high rates of tax payment would appear to 
offset the cost of service usage by Mexican migrants, particularly 
among the undocumented. However, the degree to which tax payments 
offset the social costs of immigrants also depends on whether some or 
all of the money paid in taxes is returned to migrants as a refund 
after the end of the tax year. Although we do not know whether 
respondents received a refund or how much they received, we do know 
whether they filed a return at all; and if no return was filed, then 
certainly no refund was received.
    As Table 1 shows, there is a sizeable gap between the percentage 
paying taxes and the percentage filing a return among all groups, but 
it is largest among undocumented and temporary migrants. Whereas around 
9 out of 10 citizens and legal residents paid taxes, only around 60 
percent filed a return, meaning that at least 30 percent received no 
refund. Furthermore, among undocumented and temporary migrants, even 
though two-thirds had taxes withheld, only 9 percent to 12 percent 
submitted a tax return, suggesting that upwards of 50 percent received 
no refund. Indicators of other connections to U.S. society likewise 
display similar sharp differentials according to legal status. Whereas 
around a third of documented migrants reported having a U.S. bank 
account and about a quarter owned a U.S. credit card, the respective 
figures for undocumented migrants were just 7 percent and 3 percent, 
whereas among temporary migrants they were about 5 percent in each 
    The overall pattern that emerges is one in which undocumented and 
temporary migrants, and to a lesser extent legal residents and 
citizens, pay taxes at relatively high rates but make relatively little 
use of publicly provided services and are unlikely to submit a request 
for tax refunds. This profile, however, only represents the average 
situation of migrants who may have taken trips across a range of 
different years, and our review of recent shifts in immigration and 
welfare policy suggest that rates of usage might have changed 
dramatically in the 1990s. In the next section, therefore, we examine 
trends in service usage and financial contribution by period.
                trends in service use and contributions
    We classify the time of the trip into four distinct periods. Years 
prior to 1987 correspond to the pre-IRCA period, years before the 
passage of the Immigration Reform and Control Act, which dramatically 
altered the status quo for Mexican immigrants in a variety of ways, 
notably by criminalizing undocumented hiring, legalizing former 
undocumented workers, and inaugurating a secular build-up of border 
enforcement resources. The period 1987-1992 is the period immediately 
post-IRCA when legalization applications were being processed, 2.3 
million Mexicans were receiving permanent residence status, and the 
size and resources of the U.S. Border Patrol began to expand. The 
period 1993-1996 is when Proposition 187 mobilized anti-immigrant 
sentiment in California, Operation Blockade was launched to prevent the 
crossing of undocumented migrants in El Paso, and Operation Gatekeeper 
was inaugurated to prevent unauthorized border-crossings in San Diego. 
This period culminated with the passage of the Immigration and Welfare 
Reform Acts in 1996. The final period is the post-reform period, when 
border enforcement reached new heights (Andreas 2000; Massey, Durand, 
and Malone 2002).
Documented Migrants
    Figure 1 shows period-specific trends in the use of social services 
by household heads who were citizens or legal resident aliens at the 
time of their last trip, focusing on those services for which data 
exist across all survey years. The overall direction of the usage 
curves is downward, providing support for the ``chilling effect'' of 
U.S. policies noted by Zimmerman and Fix (2004), even for unrestricted 
services such as education and medical care. Whereas 70 percent of 
documented migrants said they used a doctor on trips taken prior to 
1993, afterward the usage rate fell sharply, reaching 55 percent in 
1993-1996 and 41 percent in 1997-2002. A similar pattern is observed 
for hospital usage, which fell from 68 percent before 1987 to 42 
percent in 1997-2002. Use of public schools by documented migrants 
likewise dropped from 52 percent before IRCA to just 19 percent in the 
post-reform era after 1996, and unemployment fell from a peak of around 
33 percent in 1987-1992 to just 9 percent in 1997-2002. Rates of 
welfare and food stamp usage were very low irrespective of period, 
fluctuating closely around 10 percent.

    The foregoing graph thus confirm a ``chilling effect'' in the use 
of public services by legal Mexican immigrants but suggest that it 
started before national reform legislation was passed in 1996, dating 
back to Proposition 187 and the various border mobilizations in the 
early 1990s. While a chilling effect may have taken hold in the use of 
public services, however, it does not appear to have extended to the 
payment of taxes and other societal contributions. Figure 2 shows that 
the withholding of Federal taxes remained high and steady in the range 
of 80-90 percent from before 1987 through 1996, and then increased to 
record levels that approached 100 percent in later years. As of the 
most recent period, 97 percent reported tax withholding and 67 percent 
reported filing a tax return, yielding a smaller gap than before 1987 
but sizeable nonetheless. The only decline was in the percentage of 
respondents who said they paid for their own health care; it dropped 
gradually through 1996 but sharply thereafter, mirroring the shift in 
the share saying they had health insurance coverage. This suggests a 
direct substitution between insurance and out-of-pocket payment, and 
hence, no increase in the potential burden to taxpayers.

Undocumented Migrants
    Although undocumented migrants may have certain rights to education 
and health care, their usage rates are nonetheless low compared with 
documented migrants irrespective of period. But like them, undocumented 
migrants display a decline in usage rates beginning after 1992. The 
percentage seeing a doctor declined from around 37 percent on trips 
taken between 1987 and 1992 to around 18 percent between 1997 and 2002, 
and usage rates of hospitals displayed a very similar trend. Usage 
rates for entitlement programs such as welfare, food stamps, and 
unemployment compensation were well under 10 percent across all 
periods, and trended down toward zero in the final period. The use of 
U.S. public schools by undocumented migrants peaked at around 14 
percent in 1987-1992 and fell by half to 7 percent in 1997-2002.

    As with documented migrants, the decline in undocumented service 
usage was not accompanied by a corresponding drop in their financial 
contributions. As shown in Figure 4, tax withholding among them dipped 
slightly during the periods 1987-1992 and 1993-1996, but then recovered 
to reach a level of around 66-67 percent in 1997-2002, just below where 
it had been before 1987. At the same time, the percentage of 
undocumented migrants filing a tax return, which was low to begin with, 
fell even lower after 1992 reaching 5 percent in 1997-2002. Whereas 
two-thirds of undocumented migrants paid into the U.S. tax system, the 
vast majority did not file a tax return to collect a refund and most 
were not using any services. However, the rate at which undocumented 
migrants reported paying for their health care declined slowly from 52 
percent to 42 percent, and unlike documented migrants, this shift was 
not offset by an increase in insurance coverage.

Temporary Migrants
    Perhaps the starkest evidence of a chilling effect after 1996 
occurred among legal temporary migrants. As shown in Figure 5, visits 
to the doctor held fairly steady at just under 30 percent from before 
1987 through 1996, but then plummeted to 5 percent. The pattern for 
hospital visits was similar, dropping from 22 percent in 1993-1996 to 6 
percent in 1997-2002. By the most recent period, usage rates for 
virtually all social services had converged to a narrow range from 0 
percent to 6 percent, by far the lowest of any legal status group.

    Despite the decline in service usage, the contribution rates 
generally remained steady, with approximately 50 percent of temporary 
migrants reporting the withholding of Federal taxes in the most recent 
period and a slight decline in the tendency to file tax returns, which 
was only reported by 8 percent of respondents (see Figure 6). As with 
the documented migrants, there was a sharp decline in personal payments 
for health care, but like undocumented migrants, this drop was not 
offset by a corresponding increase in insurance coverage.

                      determinants of service use
    Although the foregoing analyses are consistent with the hypothesis 
of a chilling effect in the use of public services, it is always 
possible that the trend toward lower rates of service usage reflects 
changes in underlying individual or family characteristics associated 
with service use rather than shifts in public policies or political 
climate. Table 2 thus estimates a series of logistic regression models 
to predict the odds of using three kinds of services from a series of 
period indicators while controlling for a migrant's personal 
characteristics, education, occupation, family situation, prior U.S. 
experience, and legal status. If migrants reported using food stamps, 
welfare, or unemployment on the last U.S. trip, we coded the indicator 
for social service usage as 1 and set to 0 otherwise. If migrants 
reported going to a doctor or hospital on the most recent U.S. visit, 
the indicator for health services was coded 1 and set to 0 otherwise. 
Finally, the indicator for public schools is a simple dummy variable 
that took the value of 1, when respondents reported having children in 
U.S. schools, and 0 otherwise. In all comparisons, the reference 
category is the pre-IRCA (before 1987) period.

  Table 2.--Effect of Selected Characteristics on the Use of Public Services by Mexican Migrants in the United
                                            Social Welfare          Health Services           Public Schools
              Variables               --------------------------------------------------------------------------
                                             B           SE           B           SE           B           SE
Period of Trip:
  1987-1992..........................        1.198*      0.099        0.439*      0.037        0.238*      0.042
  1993-1996..........................        1.184*      0.072        0.438*      0.052        0.058       0.062
  1997-2002..........................        0.579*      0.082       -0.212*      0.050       -0.569*      0.070
Personal Characteristics:
  Female.............................        0.794*      0.075        0.748*      0.069        0.964*      0.069
  Age................................       -0.123*      0.009        0.007       0.007        0.160*      0.009
  Age Squared........................        0.001*      0.000        0.000       0.000       -0.001*      0.000
  Married............................        0.329*      0.054       -0.281*      0.042        0.702*      0.050
  Speaks Some English................        0.067       0.047        0.589*      0.035        0.590*      0.038
Years of Schooling:
  1-5................................        0.167*      0.073       -0.186*      0.045       -0.090       0.057
  6-11...............................       -0.406*      0.075       -0.335*      0.050        0.007       0.060
  12+................................        0.102       0.089       -0.785*      0.069       -0.785*      0.082
U.S. Occupation:
  Skilled Manual.....................       -0.675*      0.138       -0.247       0.161       -0.079       0.129
  Unskilled Manual...................       -0.685*      0.124       -0.252       0.158       -0.086       0.125
  Agricultural.......................       -0.366*      0.140       -0.245       0.161       -0.534*      0.120
  Not Working........................       -0.901*      0.173       -0.615*      0.174        0.115       0.150
  Job Missing........................       -0.035       0.188       -0.938*      0.202       -0.305       0.171
Family in United States:
  No. of Siblings in United States...        0.123*      0.010        0.081*      0.009        0.070*      0.009
  Parent in United States............       -0.333*      0.045        0.279*      0.038       -0.198*      0.041
  No. of Relatives in United States..        0.003*      0.001        0.014*      0.001        0.007*      0.001
  No. of U.S.-Born Children..........        0.634*      0.018        1.764*      0.046        1.071*      0.020
U.S. Experience:
  No. of Prior Trips.................        0.007       0.004        0.033*      0.003        0.040*      0.003
  Duration of Last Trip..............       -0.001*      0.000        0.008*      0.001        0.006*      0.001
Legal Status:
  Legal or Citizen...................
  Temporary..........................       -0.715*      0.099       -0.658*      0.051       -0.501*      0.068
  Undocumented.......................        0.422*      0.049       -0.377*      0.038       -0.089*      0.041
Intercept............................       -0.912*      0.232       -0.859*      0.211       -6.771*      0.232
-2 Log Likelihood....................   19,613.89                29,744.70                24,602.97
No. of Cases.........................    3,867                    3,876                    3,928

    Across the three models, the personal and family characteristics 
generally behave as one might expect. Women display higher propensities 
toward service use than men and usage generally increases with U.S. 
experience, the accumulation of family members in the United States, 
and English language ability. In contrast, the likelihood of service 
consumption is lower for other occupations compared with professionals 
and among temporary and undocumented migrants. Holding these and other 
effects constant, however, we continue to observe a temporal pattern 
consistent with the hypothesis of a chilling effect.
    Other things equal, there is a highly significant increase in the 
propensity to consume U.S. public services just after IRCA's passage in 
1986. Compared to a coefficient of zero before 1987 (the effective 
coefficient for the reference category), the coefficient predicting 
welfare use increases to 1.198 during 1987-1992 while that predicting 
the use of health services rises to 0.439 and that predicting school 
usage goes to 0.238. The propensity to consume social welfare and 
health services remains essentially unchanged in 1993-1996, but 
thereafter, the odds of service consumption fall significantly relative 
to the 1987-1996 period. The coefficient predicting social welfare 
usage falls from 1.184 during 1993-1996 to 0.579 during 1997-2002, 
while that predicting the use of health services goes from 0.438 to 
-0.212. The negative coefficient indicates that the likelihood of going 
to a doctor or hospital fell to an all-time low during the period 
immediately after passage of the Immigration and Welfare Reform Acts of 
    The decline in the likelihood of sending children to public schools 
was both more gradual but also more extreme compared with the other 
service usage trends. It was more gradual in the sense that elevated 
usage rates did not prevail from the period 1987-1992 into 1993-1996. 
Rather the coefficient predicting school usage fell from 0.238 in the 
former period to 0.058 in the latter, a statistically significant 
shift, and continue to proceed monotonically thereafter. The trend was 
also more extreme, however, because the probability of school use fell 
very sharply after 1996, with the coefficient attaining the large 
negative value of -0.569. However, as with the use of health services, 
the probability of using schools fell to an all-time low after 1996. In 
sum, among Mexico-U.S. migrants at the turn of the century, fewer 
people sought medical care and sent children to public schools than at 
any point in the post-war history of Mexico-U.S. migration, and receipt 
of social services was well down from its peak immediately after 1986.
                determinants of financial contributions
    Table 3 estimates the same basic model to predict the likelihood of 
making selected contributions: paying Federal taxes (either social 
security or income taxes); filing a Federal tax return; and purchasing 
health insurance. In general, the control variables show that the 
likelihood of making such contributions is lower for women, varies in 
curvilinear fashion with age, and rises with U.S. experience, English 
ability, education, and a growing number of family members in the 
United States. It is generally lower for temporary and undocumented 
migrants and for incumbents of nonprofessional occupations.

  Table 3.--Effect of Selected Characteristics on Contributions Made by Mexican Migrants  in the United States
                                                Paid Taxes           Submitted Return         Health Insured
               Variables                ------------------------------------------------------------------------
                                               B           SE          B           SE          B           SE
Period of Trip:
  1987-1992............................       -0.153*      0.039       1.147*      0.080       1.506*      0.108
  1993-1996............................       -0.077       0.058       1.002*      0.098       2.026*      0.145
  1997-2002............................        0.168*      0.055       0.767*      0.094       3.263*      0.135
Personal Characteristics:
  Female...............................       -1.195*      0.067      -1.085*      0.014       0.157       0.137
  Age..................................        0.054*      0.008       0.050*      0.015      -0.143*      0.020
  Age Squared..........................       -0.001*      0.000       0.000       0.000       0.001*      0.000
  Married..............................       -0.066       0.044      -0.163*      0.076       0.487*      0.030
  Speaks Some English..................        0.204*      0.040       0.711*      0.060       0.036       0.081
Years of Schooling:
  1-5..................................        0.429*      0.046       0.368*      0.137       0.144       0.167
  6-11.................................        0.592*      0.051       0.245*      0.116       0.116       0.161
  12+..................................        0.543*      0.073      -0.126       0.137       1.311*      0.173
U.S. Occupation:
  Skilled Manual.......................       -1.289*      0.252      -0.126       0.243       0.489*      0.202
  Unskilled Manual.....................       -1.163*      0.251       0.198       0.241      -0.341       0.196
  Agricultural.........................       -0.854*      0.253       0.163       0.249       0.448*      0.213
  Not Working..........................       -5.678*      0.282      -1.421*      0.368      -1.201*      0.327
  Job Missing..........................       -0.452       0.286       1.312*      0.280      -1.502*      0.554
Family in United States:
  No. of Siblings in United States.....        0.010       0.011       0.019       0.014       0.029       0.017
  Parent in United States..............        0.308*      0.044       1.502*      0.072      -0.308*      0.079
  No. of Relatives in United States....        0.009*      0.001       0.014*      0.001      -0.002*      0.001
  No. of U.S.-Born Children............        0.282*      0.026       0.381*      0.033       0.056       0.030
U.S. Experience:
  No. of Prior Trips...................        0.021*      0.004       0.122*      0.008       0.063*      0.008
  Duration of Last Trip................        0.005*      0.001       0.381*      0.033       0.007*      0.001
Legal Status:
  Legal or Citizen
  Temporary............................       -1.066*      0.062      -0.709*      0.087       1.683*      0.116
  Undocumented.........................       -1.291*      0.050      -1.107*      0.068       0.515*      0.087
Intercept..............................   1,347*           0.302      -4.235*      0.363      -2.839*      0.422
-2 Log Likelihood......................   26,577.44                9,181.281               7,042.267
No. of Cases...........................    3,725                   1,441                   1,896

    Once the effects of these variables are held constant, however, we 
see no chilling effect in the odds of paying taxes or the purchase of 
health insurance. On the contrary, if anything, Mexican migrants are 
more likely to make a contribution. The odds of paying taxes, for 
example, rise monotonically from 1987-1992 through 1993-1996 to 1997-
2002, with coefficients of -0.153, -0.077, and 0.138, respectively. 
Likewise, the odds of being covered by health insurance also move 
steadily upward, with the coefficient going from 0 before 1987, to 
1.506 during 1987-1992, reaching 2.026 in 1993-1996, and peaking at 
3.263 in 1997-2002. However, while the odds of filing a return hold 
constant from 1987-1992 through 1992-1996, they decline significantly 
in the latest period. Thus, Mexican migrants become more likely to pay 
taxes and be covered by insurance, but the propensity to file tax 
returns dips in the most recent period.
    Together, the declining rates of service usage combined with 
increasing rates of tax payment and health insurance coverage suggest a 
falling propensity for Mexican migrants to use unreimbursed social 
services in the United States. We examined this hypothesis more closely 
by estimating an equation to predict the odds of receiving two 
unreimbursed services on the last U.S. trip. The left-hand columns of 
Table 4 present coefficients from a model that predicts consumption of 
unreimbursed medical services, defined as use of a doctor or hospital 
but no payment by personal funds, family funds, or insurance. The 
right-hand columns show coefficients from a model that predicts 
unreimbursed social services, defined as receiving food stamps, 
welfare, or unemployment payments but no tax withholding.

 Table 4.--Effect of Selected Characteristics on the Unreimbursed Use of Public Services  by Mexican Migrants in
                                                the United States
                                                                    Medical Services         Social Services
                           Variables                            ------------------------------------------------
                                                                       B          SE         B            SE
Period of Trip:
  1987-1992....................................................        0.495*   0.055        0.697*        0.105
  1993-1996....................................................        0.780*   0.073        0.464*        0.156
  1997-2002....................................................        0.040    0.087       -0.848*        0.236
Personal Characteristics:
  Female.......................................................        1.503*   0.067*       2.179*        0.120
  Age..........................................................       -0.050*   0.009       -0.262*        0.017
  Age Squared..................................................        0.001*   0.000        0.003*        0.000
  Married......................................................        0.035    0.056        0.478*        0.103
  Speaks Some English..........................................        0.051    0.053       -0.278*        0.105
Years of Schooling:
  1-5..........................................................       -0.570*   0.068        1.674*        0.274
  6-11.........................................................       -0.783*   0.071        1.291*        0.273
  12+..........................................................       -0.726*   0.097        1.460*        0.296
U.S. Occupation:
  Skilled Manual...............................................        1.574*   0.428
  Unskilled Manual.............................................        1.607*   0.426        0.443         0.119
  Agricultural.................................................        1.094*   0.430       -0.790*        0.205
  Not Working..................................................        3.465*   0.431
  Job Missing..................................................       -0.227    0.538
  Not Working/Job Missing......................................       NA       NA            0.393         0.182
Family in United States:
  No. of Siblings in United States.............................        0.067*   0.013        0.058*        0.023
  Parent in United States......................................       -0.300*   0.057       -0.317*        0.102
  No. of Relatives/Friends in United States....................        0.001    0.001        0.007*        0.002
  No. of U.S.-Born Children....................................       -0.036    0.025        0.214*        0.040
U.S. Experience:
  No. of Prior Trips...........................................        0.031*   0.005        0.033*        0.010
  Duration of Last Trip........................................        0.001    0.000       -0.001*        0.000
Legal Status:
  Legal or Citizen
  Temporary....................................................        0.083    0.087       -2.904*        0.457
  Undocumented.................................................        0.745*   0.058        0.366*        0.106
Intercept......................................................       -3.433*   0.469       -1.735*        0.402
-2 Log Likelihood..............................................   16,165.69              5,095.766
No. of Cases...................................................    3,837                 3,883

    As the period indicators show, the likelihood of using medical 
services without paying for them increased through 1987-1992 and 1993-
1996 and then plummeted after 1996 to equal levels observed during the 
period before 1987. In contrast, the use of unreimbursed social 
services surged immediately post-IRCA in 1987-1992 (when the 
coefficient reaches .697), then fell modestly during 1993-1996 
(coefficient of .464) before dropping precipitously after the 
implementation of the Immigration and Welfare Reform Acts in 1996 (to 
reach -.848 in 1997-2002). In other words, our analyses clearly 
indicate that Mexican migrants are less likely to make use of public 
services and they are more likely to pay in some way for the services 
they do use, putting the unreimbursed use of public services at levels 
that are at or below historical levels.
    We thus confirm Zimmerman and Fix's (1998) hypothesis of a chilling 
effect in the consumption of social services. Raw trends showing 
declines in service usage after 1996 are confirmed by multivariate 
analyses that control for possible changes over time in characteristics 
associated with service usage, such as family circumstances, U.S. 
experience, socioeconomic status, and unlike prior research, legal 
status. In addition, however, we have also documented rising rates in 
tax payments and the purchase of health insurance. The net effect of 
these two countervailing trends has been a sharp decline in the use of 
unreimbursed services by Mexican migrants to the United States. These 
results confirm the earlier findings of Massey and Espinosa (1997), 
which suggest that migrants are not attracted to the United States by 
the prospect of generous social transfers. If anything, they continue 
to migrate despite steady erosion in access to services and a growing 
proclivity toward the payment of taxes from which many will never 
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Vernez, Georges and Kevin McCarthy. 1995. The Fiscal Costs of 
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     Response to Questions of Senator Kennedy and Senator Sessions 
                     by Professor Charles M. Beach
                      question of senator kennedy
    Question. The retirement of baby-boom generation workers and the 
decrease in the proportion of the working age population are causing 
demographic pressures in Canada that are similar to those in the United 
States. Canadian labor market conditions are already tight in low-
skilled areas like construction. Canada, however, has decided to focus 
its immigration policy on skilled professionals, many of whom do not 
find jobs that match the level of their qualifications. Indeed, the 
Conference Board of Canada estimates underemployment affects 
approximately 340,000 immigrants annually.
    Doesn't this data suggest that Canada's immigration point system is 
not meeting the country's needs? Isn't the Canadian government trying 
to find ways to meet the unskilled labor shortage? Won't the United 
States experience similar problems with such a point system?
    Answer. Your observations on underemployment problems in your first 
paragraph are correct. But this does not mean that we should not have a 
point system. The underemployment of skilled workers I would recommend 
dealing with through better language training and job matching efforts 
as well as much stronger efforts to deal with local recognition of 
foreign credentials and foreign work experience. For example, part of 
the problem of foreign professional credential recognition is that the 
latter essentially comes under provincial jurisdiction while the 
immigration admission process is largely done by the Federal 
Government--such jurisdictional problems may be considerably less than 
in the United States. Australia, for example, now requires that foreign 
professional credentials be evaluated before an immigrant arrives in 
the host country. Perhaps this is an option that Canada should 
    So, I would say that any such problems as above should not imply 
that one shouldn't have a point system to evaluate skills of immigrant 
applicants, but rather do imply that the criteria we currently 
incorporate in the point system should perhaps be revised so as to put 
more weight on skilled tradesmen. I think it is true that the current 
weighting scheme built into the Canadian point system does put perhaps 
too much weight on white-collar professional skills (such as years of 
education and university degrees) and not enough weight on blue-collar 
tradesmen's skills. I do not think we should be letting in large 
numbers of unskilled labor when the overall Canadian unemployment rate 
is 6.4 percent. We should allow the market to adjust so that more 
workers move from Ontario, Quebec and Atlantic Canada to Alberta and 
B.C. where the shortages of unskilled workers exist. If the overall 
unemployment rate were below 4 percent, say, I would be more 
sympathetic to bringing in more unskilled or lower-skilled workers. 
Also of a concern is that the demand for lower-skilled workers, 
especially in the construction sector, is highly cyclical, and if you 
bring in a lot of lower-skilled workers during the peak of the business 
cycle you are then likely to have a real problem of unemployment 
welfare costs when a recession hits. More generally, I would note that 
a point system can be very flexible in what criteria you want to award 
points to and how many points to award. Just because there are some 
admitted problems in some dimensions does not mean that it is not 
worthwhile having a point system at all. It can be revised and adapted 
to try to deal with various problems that may come up as time goes on. 
Economic and labor market conditions always change over time, and 
having some flexibility in dealing with these changes is a good thing.
                     questions of senator sessions
    Question 1a. During your testimony, you indicated that there are 
many reasons for the declining rate of adjustment (assimilation) of 
immigrants. However, you point out that the figures cited by Professor 
Massey to illustrate the declining rate, lump both independent migrants 
and other types of migrants into the same category.
    Can you explain why it is important to separate these two distinct 
types of immigrants when determining how fast each adjusts?
    Answer 1a. It is important to separate independent (or economic) 
class from other classes of immigrants such as family class and 
humanitarian class because their process of adjustment and their rate 
of adjustment to their new economic environment are different. In the 
case of independent class immigrants, they arrive on the basis of the 
skills of their principal applicant and these skills help the latter to 
adjust faster to better contribute to the U.S. labor market. Those who 
arrive not on the basis of their skills, have a much slower process of 
adjustment that relies more on family (in the case of family class 
arrivals) and public (in the case of refugees) support, and that likely 
involves a much lengthier time learning the local language (English) 
before they can make it well on their own.

    Question 1b. Is it clear that independent migrants adjust more 
quickly than other types? Please explain why you think this is true.
    Answer 1b. The research evidence is quite clear--Professor Borjas 
referred to it as well in his oral testimony--the independent class 
immigrants to adjust more quickly than the other types. See, for 
example, the papers cited on p. 4 of my research paper ``Impacts of the 
Point System and Immigration Policy Levers on Skill Characteristics of 
Canadian Immigrants'': Duleep and Regets (1992, 1996), Jasso and 
Rosenzweig (1995), de Silva (1997), Miller (1999), Abbott and Dougherty 
(2004), and Chiswick, Lee and Miller (2005, 2006) where the full source 
references are listed in the References section of my above paper which 
was provided to the committee staff prior to the hearing. The reason 
this result is true is simply that workers with greater amounts of 
skill adjust faster to the new labour market, are generally more 
productive at their work, and add more to the local economy.

    Question 2. Which of the three immigration policy levers you 
discussed in your testimony do you consider to be the strongest single 
factor in raising the average skill levels of immigrants? Why?
    Answer 2. We found in our paper that the one policy lever which had 
the strongest effect in raising average skill levels of immigrants as a 
whole was the proportion of immigrants admitted under the point system 
(ie., were skill evaluated)--that is, the fraction of all admissions 
who arrive as independent class immigrants. Even if you do not bring in 
a point system, you will accomplish this effect if you decrease the 
proportion of (legal) immigrants coming in under the family class and 
increase the fraction coming in under the employer preference class. 
Interestingly, in some quite unrelated work I have been involved in 
recently on analyzing the factors that influence the rate of aging of 
the Canadian workforce and population, a paper by several researchers 
in Ottawa using a totally different methodology (dynamic equilibrium 
life-cycle micro-simulation) also found that increasing the share of 
skill-evaluated immigrants had a larger effect than increasing the 
required skill level within the point system itself. The reason why 
increasing the skill-evaluated share has the strongest effect is simply 
that it operates on such a large base of immigrants rather than just on 
a (relatively small) subset of immigrants. Now if the proportion of 
skill-evaluated immigrants were around 80 percent, say, this result 
would probably no longer hold, and a stronger effect could be gotten 
from simply raising the required skill-level for admission within the 
point system itself.

    Question 3a. In Canada there is a temporary seasonal program, where 
workers stay for 6 to 10 months then return, which has been very 
    In your opinion how important is the fact that these workers must 
return home on a regular basis to the overall success of the program?
    Answer 3a. I consider it absolutely critical that the temporary 
workers return home on a regular basis. Otherwise, they are likely to 
form local attachments, settle down and start raising a family. Any 
child born into the family then likely becomes a citizen of the host 
country and immigration authorities are then caught between breaking up 
a family and denying full citizenship rights to at least part of the 
family. This then raises the social and economic problems that we have 
seen blow up this past year in France, Germany and elsewhere in Europe 
which we have seen played out across front pages of the world's 
newspapers. The income that these temporary workers receive--
particularly agricultural workers--is low by host-country standards, 
but desirably high in terms of the origin-country's living standards. 
So they find it advantageous to return home with their new earnings to 
support their family or start a new business back home. But if they 
stay in the host country for a lengthy amount of time at such low wages 
and start raising a family in the host country, economic and social 
friction and possibly crime are likely to arise and the children in 
such environment may well start raising problems--which is just what 
has happened in Europe.

    Question 3b. In your opinion what length of stay should temporary 
workers be allowed? How long is too long, turning a temporary worker 
into a semi-permanent or permanent worker?
    Answer 3b. I do not know an exact number, but I would say no longer 
than 9 or 10 months at the max. Basically, not long enough to form 
permanent attachments and settle down.

    Question 3c. How important to the goal of keeping the program 
temporary is it that family members are not permitted to accompany the 
worker for the 6- to 10-month work period in Canada? If the United 
States enacts similar temporary worker programs, would you recommend 
that the temporary guest workers to the United States not be allowed to 
bring family with them?
    Answer 3c. I am not familiar with the details of the Canadian 
temporary worker program, but I would be wary of admitting full family 
units under this program again because any children born while in the 
host country likely acquire full rights of citizenship of the host 
country and this can lead to problems as indicated above. Yes, I would 
recommend that temporary guest agricultural workers to the United 
States not be allowed to bring family with them. I would not recommend 
this requirement for temporary skilled workers because it is 
increasingly the case that skilled workers have partners who are also 
skilled workers--or at least highly educated--and preventing them from 
bringing their partners with them and indeed preventing their partners 
from working in the United States, as well, could severely limit the 
supply of skilled labor you may wish to attract, even on a temporary 
     Responses to Questions of Senator Kennedy by Douglas S. Massey
    Question 1. Our immigration law emphasizes reunification of 
families. Family members help each other adjust to their new 
surroundings by pooling resources and sharing responsibilities. Strong 
families help stabilize communities. And family-based immigrants, while 
they have lower entry earnings, have higher earnings growth than 
employment-based immigrants.
    In the United States were to adopt an immigration point system 
similar to that in Australia or Canada and put less emphasis on family 
reunification, what do you believe would be the social and economic 
consequences, both for individual immigrants and for our economy as a 
    Answer 1. In the United States, rates of poverty, social service 
usage, and unemployment among immigrants are very low compared with 
Canada. This is because families look out for their members and when 
they sponsor a new immigrant they usually have jobs, housing, and other 
supports lined up. As a result, family immigrants are placed quickly on 
a path of work and mobility. Canada has a system that admits immigrants 
based on points earned for educational and occupational credentials 
without taking into account whether those credentials are actually 
needed at the moment, and without considering who might support them 
after their arrival if they are unable initially to get jobs in their 
profession. As a result, poverty and unemployment rates among 
immigrants to Canada are extraordinarily high and, in the absence of 
supportive family networks, the costs to government are significant. 
The same negative outcomes could be expected in the United States if it 
were to change the weighting of family versus employment criteria to 
favor the latter over the former.

    Question 2. Economists like Alan Greenspan have made it clear that 
immigration was a primary factor in America's unprecedented growth 
without inflation during the 1990's. Immigrants contribute to public 
coffers by paying sales, income, payroll, and property taxes. One study 
has found that the net present value of immigrants' estimated future 
tax payments exceed the cost of the public services they were expected 
to use by $80,000 for the average immigrant and his or her dependents. 
In your testimony, you mentioned that as a result of legislation in 
1996, immigrants are paying more taxes and using fewer services. As a 
result, you concluded that it is likely that immigrants contribute more 
in taxes than they use in services.
    Can you elaborate on his point? Upon what do you base your 
    Answer 2. This conclusion is based on a detailed analysis of data 
from the Mexican Migration Project, which I co-direct. Funded by the 
National Institutes of Health and in the field gathering data since 
1982, the MMP is an award-winning project offers the most comprehensive 
and reliable source of information about the behavior and 
characteristics of undocumented migrants, yielding information that is 
not available from any other source. The data are publicly available 
from the project's Web site at http://mmp.opr.princeton.edu/. The 
rising rate of tax payment and the falling use of services by both 
documented and undocumented immigrants is documented in a paper 
presented at the Annual Meeting of the Population Association last 
spring, a copy of which is attached to this e-mail.

    Question 3. Economic prosperity in the United States and Mexico are 
increasingly linked. Over the past decade trade between the United 
States and Mexico has nearly tripled. Mexico is America's second-
largest trading partner and we are Mexico's largest. Mexico's 
president-elect has highlighted the importance of job creation and 
economic development in Mexico in order to both improve economic 
conditions in Mexico and to reduce illegal immigration to the United 
States. An Inter-American Development Bank study suggests that 
remittances from the United States reduce infant mortality and 
illiteracy in Mexico while alleviating poverty and improving living 
    How important for Mexico's prosperity is the permanent and 
temporary migration to the United States? What would be the effects in 
Mexico of reducing this migration?
    Answer 3. Remittances from migrants working in the United States 
now exceed $20 billion annually and represents a major source of 
foreign exchange that not only contributes to Mexico's international 
liquidity, but represents a major source of investment and spending 
that invigorates the Mexican economy. According to estimates we 
developed using MMP data and input-output multipliers estimated for the 
Mexican economy, the arrival of $20 billion actually generates $65 
billion in production once it has cycled through the economy. Reducing 
this flow would thus cut Mexico off from a major source of capital and 
income that millions of families rely upon to smooth consumption and 
make investments in the absence of a strong banking sector.

    Question 4. The 2000 Census reveals that one-third of all U.S. job 
categories would have shrunk significantly in size during the 1990s in 
the absence of recently arrived, non-citizen workers, even if all 
unemployed U.S.-born workers with recent job experience in those 
categories had been re-employed. Thirteen occupational categories 
collectively would have been short more than 500,000 workers during the 
1990s without such immigrants, making immigration a crucial component 
of this country's economic well-being.
    Don't you agree that immigrants contributed significantly to the 
economic boom in the 1990s?
    Answer 4. It is clear to me that the boom of the 1990s would have 
ended sooner were it not for the labor market flexibility provided by 
immigrants. During the last years of the decade unemployment rates had 
fallen well below levels that economists said would be possible without 
spurring inflation, and yet no inflation was occurring--despite the 
fact that wages were rising. This was primarily because the input of 
immigrant labor prevented labor shortages from creating productive 
bottlenecks that would have driven up prices.
     Response to Questions of Senator Sessions by George J. Borjas
    Question 1a. Many objectives of a Nation, such as economic 
objectives, social objectives, and humanitarian objectives, can be 
advanced through immigration policies. These objectives must be 
balanced in a way that best serves the national interest.
    Canada and Australia have recently reformed their immigration 
policies to give economic objectives a higher priority. They have done 
this through use of a point system that evaluates the educational and 
language skills of employment-based immigrant applicants. Approximately 
60 percent of the annual immigration levels in Canada and Australia are 
comprised of economic-based immigration. In striking contrast, only 20 
percent of the immigrants in the United States each year are skill-
based immigrants that will serve our economic interests.
    Would the economic national interest of the United States be better 
served if we altered the percentage of employment-based admissions to 
more closely reflect the 60/40 split between economic-based immigration 
and family and humanitarian-based immigration, as used by other 
developed nations such as Canada and Australia?
    Answer 1a. There's little doubt that the net economic benefits to 
the United States would increase substantially if immigration policy 
were to place heavier weight on the skills of potential applicants. So 
the answer to the question is an unambiguous yes.

    Question 1b. Assuming the United States were to adopt a point 
evaluation system for employment-based immigrant applicants, please 
describe the value that each of the following items would have in such 
a system. Please rank the items in order of their significance in 
determining whether a future immigrant will be an economic net gain to 
the economy.

    i. Education
    ii. Language Skills
    iii. Age
    iv. Job Offer in the United States
    v. Prior Work Experience
    vi. Spouse's Characteristics
    vii. Prior Work or Study in the United States
    viii. Family Members Already in the United States

    Answer 1b. The ``permanent'' earnings potential of the migrant will 
likely depend most on their education, language skills, and work 
experience. These are the key variables that the human capital model 
suggests are important determinants of earnings, and I would probably 
stress those variables most in constructing any type of skills filter.

    Question 2a. You agree with Professor Doug Massey, your fellow 
panelist, that the family-based immigration preference for siblings is 
one of the biggest factors in chain migration.
    Do you agree that the United States would benefit from eliminating 
the sibling preference? How so?
    Answer 2a. I don't know if the word ``benefit'' is the correct word 
to apply in an argument for eliminating the sibling preference. I think 
the main reason for eliminating it is simply that it is the one 
preference that opens up the potential for ``unrelated'' family members 
to obtain entry visas. From a wider perspective, there's little reason 
to believe that the sibling preference lets in less skilled workers 
than the other family preferences.

    Question 2b. Are there any other preferences, such as the 
preference for married sons and daughters, that you think should be 
changed or eliminated?
    Answer 2b. I don't really have any opinion on the specific 
preference for sons and daughters.

                         diversity visa lottery
    Question 3a. What is the purpose of the diversity visa program?
    Answer 3a. What is the purpose? To be completely honest: Beats me! 
It is a bad idea, a bad design--a bad policy.

    Question 3b. How many people applied for the 50,000 immigrant visas 
available under the program in each of the last 10 years?
    Answer 3b. I don't know exactly how many people have applied in 
each of the past 10 years. But I've looked at the State Department 
report on the Diversity Visas a few times in the past, and the numbers 
are typically in the millions. I've just googled the latest information 
    july 19, 2006--diversity visa process selects 82,000 applicants
    Applicants could win one of 50,000 visas to United States.
    Washington.--Approximately 82,000 people in 175 nations have 
received letters from the U.S. State Department informing them that 
they are eligible to apply for a permanent resident visa to the United 
    Only 50,000 such visas are issued each year in what is known as the 
Diversity Visa Lottery. More than 5.5 million people submitted entries 
in the registration process held during the last quarter of 2005. 

    Question 3c. Does the diversity visa lottery program serve our 
economic interests?
    Answer 3c. No response.

    Question 3d. Does the diversity visa lottery program serve our 
family unification interests?
    Answer 3d. No response.

    Question 3e. In your opinion, would it be wise to eliminate the 
program and use the 50,000 immigrant visas differently?
    Answer 3e. No response.

    Question 4a. In your testimony, you discussed that the number of 
people who want to come to this country is ``way greater'' than the 
number the United States can admit each year, while preserving economic 
and social stability. You illustrated this truth by reminding us how 
many people apply for the 50,000 immigrant visas available under the 
diversity lottery program.
    In your opinion, how many people should the United States admit 
each year under our current immigration laws if we want to preserve 
economic stability and foster the ideals of a melting pot society?
    Answer 4a. I do not know precisely the ``magic number'', but it is 
a number that we should probably learn by trial and error, rather than 
by a legislative mandate that will stay in the books for 50 years. I 
would start with a number near the average level of legal immigration 
in the 1980s--which is roughly around 750,000 annually. I would suggest 
a ``trial period'' for this level of immigration of 5 years, at which 
time the number should be revisited and either increased or decreased 
depending on economic conditions and on the observed impact of this 

    Question 4b. Could that number increase if current immigration laws 
were altered to place a higher priority on immigrants with higher 
skills, education levels, and language proficiencies?
    Answer 4b. Simply because skilled immigrants benefit the country 
more does not mean that we should have an unlimited number of them. A 
very high number of high-skill immigrants would likely have major 
impacts on the high-skill labor market. Again, I would not suggest 
increasing the numbers until after we experience a trial period simply 
to see and measure what the impacts are, who benefits, who loses, and 
by how much.
                   Minister of Citizenship and Immigration,
                                             Ottawa, Canada K1A 1L1
Senator Jeff Sessions,
U.S. Senate,
335 Russell Senate Office Building,
Washington DC. 20510-0104.
    Dear Senator Sessions: Thank you very much for meeting with me and 
my Government of Canada colleagues on June 29, 2006. It was a pleasure 
to have the opportunity to share views on immigration and security 
    At our meeting, you indicated a particular interest in learning 
more about Canada's skilled-worker selection system, which was 
introduced with the new Immigration and Refugee Protection Act in June 
2002. I have enclosed a short document outlining key aspects of this 
program for your information.
    Another topic in which you expressed interest was the performance 
of recent immigrants to Canada. Historically, immigrants outperformed 
Canadians in the labour market, but patterns have changed over time. In 
the late 1980s, the early 1990s and early 2000s, entry earnings of 
immigrants declined substantially. While our skilled worker immigrants 
(selected for their labour-market suitability) continue to outperform 
other immigrants and refugees, recent arrivals have faced a number of 
challenges. These challenges are faced by many immigrants in all 
countries. More details are included in the attachment.
    I trust that you will find this information useful. Should you have 
additional questions, please do not hesitate to contact me.
                                  Monte Solberg, P.C., M.P.
                 canada's federal-skilled worker class
    Canada's Federal-skilled worker class is a class of persons who are 
skilled workers and who may become permanent residents on the basis of 
their ability to become economically established in Canada and who 
intend to reside in a province other than the Province of Quebec 
(Section 75 (1) of the Immigration and Refugee Protection Regulations).
    A foreign national is a member of the Quebec-skilled worker class 
if he/she: intends to reside in the Province of Quebec; and, is named 
in a Certificat de selection du Quebec issued to them by that Province.
    To address the current and future demands of the Canadian labour 
market, the criteria for the skilled worker category (in the 
Immigration and Refugee Protection Act) are linked to the selection of 
immigrants who are capable of adapting and contributing to an evolving 
labour market. The focus is on selecting immigrants with the flexible 
and transferable skills needed to succeed in a rapidly changing, 
knowledge-based economy (human capital approach), rather than based on 
occupation. The current criteria place emphasis on the applicants' 
level of education and previous work experience, and there is 
significant importance attached to their knowledge of English or 
French. In addition, applicants with pre-arranged employment are 
awarded extra points.
    Skilled workers are assessed according to a selection grid (points 
system) and have at least 1 year of work experience within the past 10 
years in a management occupation, or in an occupation normally 
requiring university, college or technical training (Skill Type 0 or 
Skill Level A or B of Canada's National Occupational Classification). 
They are expected to have enough money to support themselves and their 
dependants as they settle in Canada.
    In addition to the above-mentioned requirements, applicants are 
assessed on a variety of selection criteria which evaluate their 
ability to adapt to the Canadian economy.

                      Selection Criteria                         Points
Education....................................................         25
Official languages (English and/or French)...................         24
Employment experience........................................         21
Age..........................................................         10
Arranged employment in Canada................................         10
Adaptability.................................................         10
  Total......................................................        100

    To be considered under the Federal Skilled Worker category, 
applicants must score a minimum of 67 out of the possible 100 points as 
of September 2003. Applicants may complete a self-assessment test on-
line to determine their likely score based on the skilled-worker 
selection grid.
    The pass mark may be amended by the Minister to reflect changes in 
the Canadian labour market, economy and society as well as the changing 
demands of prospective immigrants to Canada.
    As announced in the Annual Report to Parliament on Immigration in 
October 2005, the target for skilled worker class immigrants (principal 
applicants and family members) in 2006 is between 105,000 and 116,000.
          economic performance of recent immigrants to canada
    Historically, immigrants outperformed Canadians in the labour 
market, but patterns have changed over time. In the late 1980s, the 
early 1990s and early 2000s, entry earnings of immigrants declined 
substantially. While our skilled worker immigrants (selected for their 
labour market suitability) continue to outperform other immigrants and 
refugees, recent arrivals have faced a number of challenges. These 
challenges are faced by many immigrants in all countries.
    The incidence of low-income among recent immigrants (i.e., those 
who immigrated in the previous 5 years) almost doubled between 1980 and 
1995, that is from 24.6 percent in 1980 to 47 percent in 1995, and then 
fell to 35.8 percent in 2000 as a result of the strong economic 
recovery of the late 1990s. In contrast, low-income rates among the 
Canadian-born population dropped from 17.2 percent in 1980 to 14.3 
percent in 2000. Thus, while recent immigrants have seen some 
improvement, poverty and low-income persist.
    The graphic below shows data for skilled workers who landed in 
Canada from 1980 to 2002.

    Entry-level earnings are defined as earnings 1 year after landing 
and the data show a general trend of declining entry level earnings 
over time for successive entry cohorts. Skilled workers who landed 
during the 1980s could expect to earn more than the Canadian average 1 
year after landing. For subsequent cohorts (1990s and into this 
decade), they now earn less than the Canadian average 1 year after 
    Research suggests that the decline in earnings is due to a number 
of factors--little or no return to foreign experience of immigrants, 
declining returns to foreign education, changing source countries and 
the domestic labour market situation of the 1980s and 1990s. It is also 
felt that knowledge of official language may be a contributing factor 
and that highly educated immigrants may not possess the fluency in 
English or French needed to make full use of their education and 
    The most recent data show a substantial decline in immigrant 
earnings for skilled workers. Some of this recent decline in earnings 
appears to be related to the high-tech ``bubble'' and subsequent 
``bust.'' Given that labour market conditions in the IT (information 
technology) sector deteriorated after the ``bust'' in 2001, it is 
reasonable to assume that fewer new workers (including immigrants) have 
been able to secure employment in the high paying IT sector. 
Consequently, immigrants may be working in lower-skilled occupations 
and generally lower-paying occupations to secure entry into the labour 
market. It should be noted that over 50 percent of skilled workers who 
landed during the early 2000s intended to work in the natural and 
applied science field (a sector highly concentrated with IT workers).
    However, earnings of skilled workers consistently outperform the 
Canadian average 5 years after landing. The earnings profile of 
selected landing year cohorts is also shown in the graphic above and a 
steady increase is a common characteristic for all cohorts, regardless 
of their initial earnings.
                 Australia's Skilled Migration Program
    Australia adminsters separate Migration and Humanitarian Programs. 
The Programs provide a balance between Australia's international 
humanitarian obligations and the Government's economic, social and 
environmental objectives.
    The Migration Program has two main streams, a Skill Stream that 
targets skills and skill shortages that contribute to Australia's 
economy and a Family Stream that recognizes the importance of family 
migration to Australia's social and economic goals.
    In 2005-2006 program year the Migration Program outcome was 
143,000. The family composition was 45,000 and skilled migration 
category was 97,500.
    The Skill Steam has two broad categories. General Skilled Migration 
for people with skills in particular occupations required in Australia 
and Employer Sponsored Migration for people with recognised skills 
seeking to work in Australia sponsored by an Australian or overseas 
                       general skilled migration
    In this category, an applicant can migrate as a skilled person 
independently, or can be sponsored by an eligible Australian relative 
or State/Territory government. Visa applications may be made whilst in 
Australia, or from outside Australia.
    Basic requirements.--General skilled migration applicants must be 
able to meet several basic requirements: age (under 45 years old), 
English language, qualifications (post-high school qualifications) and 
an assessment of skills, a nominated occupation (on an approved list of 
occupations) and recent work experience (a minimum of 12 in the 18 
months before applying).
    Points test.--In addition to meeting the basic requirements, most 
General Skilled Migration visas require assessment against a ``points 
test'' and obtaining a pass mark.
    Operation of the points test.--Points are awarded for a range of 
different factors--age, skill, English language ability, specific work 
experience, for an occupation in demand and a job offer, Australian 
qualifications, spouse skills, family relationship with an Australian, 
living and studying in regional or low population growth metropolitan 
area in Australia.
    Pass mark.--The pass mark varies for different visas, but 
independent migrants need to score the highest pass mark, currently 120 
points. For an independent applicant who achieve a score below the 
required pass mark, but above another mark (the `pool' mark) the 
application will be held in reserve for up to 2 years. If the pass mark 
is lowered, the application will be further processed.
                      employer sponsored migration
    Employers are able to sponsor suitably qualified and experienced 
people for permanent residence. The employer-sponsored temporary 
residence visa is providing an increasingly popular pathway to 
permanent residence, with streamlined procedures when the person to be 
sponsored is already working for an employer.
    General requirements for this category of migration include: age 
(under 45 unless exceptional circumstances apply), appropriate English 
language ability, qualifications assessed as being equivalent to the 
Australian standard for the position, or a designated period of work 
experience in Australia (2 years) or a base salary of $A160,000.
    There is no points test for this category of visas.
                  regional-sponsored migration program
    The Australian Government works closely with State, territory and 
local governments, and regional authorities to support regional 
development and help supply the skill needs of regional employers. It 
aims to attract young, skilled, English speaking migrants to areas of 
Australia where they are most needed.
    All areas of Australia are included, except the main metropolitan 
areas including Brisbane, the Gold Coast, and Sydney.
    The relevant State or Territory Government must certify an 
employer's nomination to fill the position and the employer's 
nomination is assessed to ensure that it has been certified, that the 
position complies with Australia's stands and workplace legislation for 
wages and working conditions.
           australian-government skilled migration priorities
    The first priority is to target employer sponsored migrants, who 
move straight into jobs where there is a direct and clear need for 
their skills.
    The second priority is to target migrants who have been sponsored 
by States and Territories as they are best placed to identify the skill 
needs of their cities and regions.
    The third priority is to target migrants who have an occupation on 
an expanded and more responsive Migration Occupations in Demand List 
(MODL). The MODL is an inherent element of the points test.
    While priority was given to employer and State/territory-sponsored 
migrants in the 2005-2006 Program, the General Skilled Migration visa 
categories remain critically important as the major route to skilled 
migration in Australia in the immediate future.
                     economics of skilled migration
    Skilled migrants have a positive impact on Australian living 
standards and a highly beneficial impact on Commonwealth and State 
    Unemployment rates for migrants are closely related to proficiency 
in English, age skill level and qualifications.
    Research shows that the employment rates for recently arrived 
migrants are better now than 6 years earlier.
                       General Skilled Migration
                        what is the points test?
    For most General-Skilled Migration visas, your application will be 
assessed against a points test. You can claim points under a range of 
different factors. The maximum points that can be claimed in any one 
factor reflects how sought after those characteristics are in the 
Australian labour market.
                         what is the pass mark?
    The pass mark is the total points you need to score to be eligible 
for a points-tested General Skilled Migration visa.
             what happens if you don't meet the pass mark?
    If you score below the pass mark, but above the ``pool mark,'' your 
application will be held ``in the pool'' for up to 2 years after 
    If the pass mark is lowered at any time in that 2-year period, and 
your score is equal to or higher than the new pass mark, your 
application will be processed further.
    Apart from waiting in the pool, there are four other visa options 
you could consider if you do not meet the pass mark:

    1. If you score 110 points you may be eligible for a Skilled-
Independent Regional (Provisional) (subclass 495) visa. See: Skilled-
Independent Regional (subclass 495) visa.
    2. If you meet the pool mark for the Skilled-Independent (subclass 
136) visa, you can still lodge and register for the Skill Matching 
Database. More information on Skill Matching is available. See: Skill 
Matching Database
    3. If you are under 45 years of age, have Functional English and a 
degree, diploma or trade qualification, you can apply for a Skill 
Matching (subclass 134) visa with no initial charge. Applicants are 
registered on the Skill Matching Database and may be nominated by a 
State or Territory government for a Skilled Matching (subclass 134) 
visa, or sponsored by an employer under the Regional Sponsored 
Migration Scheme.
    This category is not points-tested. See: Skill Matching (subclass 
134) visa
    4. You may wish to apply for either the Skilled-Designated Area 
Sponsored (Provisional) (subclass 496) visa or the Skilled-Designated 
Area Sponsored Overseas Student (subclass 882) visa if you:

     are under 45 years of age;
     have functional English;
     have a degree, diploma or trade qualification; or
      have a relative, as distant as a first cousin, living in 
a designated area in Australia, who is willing and able to sponsor you.

    These visas are not points-tested. See: Skilled-Designated Area 
Sponsored (Provisional) (subclass 496) visa; Skilled-Designated Area 
Sponsored Overseas Student (subclass 882) visa
               what are the current pass and pool marks?
    The table below lists all the current pass and pool marks for the 
points-tested visas in the General Skilled Migration category.

                                                        Current  Current
                       Category                           pass     pool
                                                          mark     mark
Skilled-Independent (subclass 136) visa...............      120       70
Skilled-Independent Regional (subclass 495) visa......      110      110
Skilled-Australian Sponsored (subclass 138) visa......      110      105
Skilled-Independent Overseas Student (subclass 880)         120      120
Skilled-Australian Sponsored Overseas Student               110      110
 (subclass 881) visa..................................
Skilled-Onshore Independent New Zealand Citizen             120      120
 (subclass 861) visa..................................
Skilled-Onshore Australian Sponsored New Zealand            110      110
 Citizen (subclass 862)...............................

              how often do the pass and pool marks change?
    Changes to the pass and pool marks occur to address Australian 
labour market needs.
    You should check the current pass mark immediately before making an 
application. You will be assessed against the pass and pool mark that 
is in effect on the day you make your application.
                              FACT SHEETS
           20. Migration Program Planning Levels in Australia
    Australia's permanent immigration program has two components--
Migration, for Skilled, Family and Special Eligibility Stream migrants 
and Humanitarian, for refugees and others with humanitarian needs.
    On May 1, 2006, the Minister for Immigration and Multicultural 
Affairs, Senator Amanda Vanstone, announced the Migration Programme and 
Humanitarian Programme planning levels for the 2006-2007 year--134,000 
to 144,000 under the Migration Programme, and 13,000 in the 
Humanitarian Programme.
    This maintains the Government's commitment to an immigration policy 
which seeks to balance social, economic, humanitarian and environmental 
                         humanitarian programme
    The Humanitarian Program comprises:

     Refugees from overseas--6,000 places.
     Special Humanitarian Program--over 7,000 places (this 
includes places required for onshore needs).

    Further details are provided in Fact Sheet 60. See: Australia's 
Refugee and Humanitarian Program
                          migration programme
    The 2006-2007 Migration Programme provides up to 144,000 places, 

     46,000 places for family migrants who are sponsored by 
family members already in Australia;
     97,500 places for skilled migrants who gain entry 
essentially because of their work or business skills; and
     500 places for special eligibility migrants and persons 
who applied under the Resolution of Status category and have lived in 
Australia for 10 years.

    The skill balance of the programme has been maintained with 67.7 
percent of places in the Skill Stream.
                            programme range
    The Programme will be delivered at the upper or lower end of the 
range depending on:

     application rates in demand-driven categories such as 
partners, children and employer-nominated and business categories;
     the take-up of State-specific and regional migration 
categories to achieve a better dispersal of the intake;
     the extent of national skill shortages and the ability to 
attract migrants to these; and
     the availability of high standard applicants in the 
skilled categories.
    The delivery of a balanced Migration Programme may require caps (or 
limits) to be placed on Parent or Other Family visa subclasses.
    Further details are provided in Fact Sheet 21. See: Managing the 
Migration Program
    The following table sets out the Migration Programme planning 
levels for 2005-2006 and 2006-2007. See: Migration Programme Planning 
    Further information is available on the department Web site. See: 
    The department also operates a 24-hour national telephone service 
inquiry on line, 131 881 for the cost of a local call anywhere in 
    Fact Sheet 20, produced by the National Communications Branch, 
Department of Immigration and Multicultural Affairs, Canberra.
    Revised 17 July 2006.
     Commonwealth of Australia 2006.

      Migration (Non-Humanitarian) Program 2005-2006 and 2006-2007
                                        2005-2006          2006-2007
             Category                Planning Levels    Planning Levels
                                       Top of Range       Top of Range
Partner \1\.......................         36,300 \2\             37,300
Child \3\.........................              2,500              2,500
Preferential/Other Family \4\.....              1,700              1,700
Parent \5\........................              4,500              4,500
  Total Family....................             45,000             46,000
Employer Sponsored \6\............             15,000             15,000
Skilled Independent...............             49,200             49,200
State/Regional Sponsored \7\......             10,000             10,000
Skilled Australian Sponsored \8\..             17,700             17,700
Distinguished Talent..............                200                200
Business Skills \9\...............              5,400              5,400
  Total Skill.....................             97,500             97,500
Skill as Percent of Total                        69.2               67.7
  Total Special Eligibility.......                500                500
  Programme Planning Range........    133,000-143,000    134,000-144,000
Note: Migration Programme numbers do not include New Zealand citizens or
  holders of Secondary Movement Offshore Entry (Temporary), Secondary
  Movement Relocation (Temporary) and Temporary Protection Visas and are
  detailed at the top of planning range.
\1\ Includes spouse, fiance and interdependent. Net outcome as places
  taken by provisional visa holders who do not subsequently obtain
  permanent visas are returned to the Migration Programme in the year
  that the temporary visas expire.
\2\ An increase of 3000 partner places for 2005-2006 was agreed by
  government in March 2006.
\3\ Includes child-adoption, child dependent and orphan minor.
\4\ Includes aged dependent, carer, orphan, unmarried and remaining
\5\ Includes designated, contributory and non-contributory parents.
\6\ Includes brothers, sisters, nieces, nephews, nondependent children,
  working age parents, grandchildren and first cousins who have skilled
\7\ Includes State/Territory Nominated Independent Scheme and Skilled
  Independent Regional.
\8\ Includes brothers, sisters, nieces, nephews, nondependent children,
  working age parents, grandchildren and first cousins who have been
  skill tested.

             24. Overview of Skilled Migration to Australia
    The Skill Stream of Australia's Migration (non-humanitarian) 
Program is specifically designed to target migrants who have skills or 
outstanding abilities that will contribute to the Australian economy.
    The Australian Government continues to emphasize skilled migration, 
while maintaining a commitment to family reunion migration. The 
migration to Australia of people with qualifications and relevant work 
experience addresses specific skill shortages in Australia and enhances 
the size, skill level and ``employability'' factor of the Australian 
labour force.
    The numbers of migrants arriving under the Skill stream has risen 
from 71,240 in 2003-2004 to 77,880 in 2004-2005.
    In 2004-2005 the Skill Stream represented about 65 percent of the 
Migration Program, an increase from 62.3 percent in 2003-2004.
    About 18,700 visas were granted under the State Specific and 
Regional Migration (SSRM) mechanisms in 2004-2005, almost a 50 percent 
increase on 2003-2004.
    An additional 20,000 places has been allocated to the Skill Stream 
for the program year 2005-2006. The 20,000 additional places will be 
targeted at:

     employer sponsored migration;
     state/territory government sponsored applications; and
     applicants who nominate an occupation which is on the 
Migration Occupations in Demand List (MODL).
                       skilled stream categories
    There are five main categories of skilled migrants:
1. Independent Migrants
    Independent migrants are selected on the basis of their age, 
skills, qualifications, English language ability and employability so 
that they can contribute quickly to the Australian economy.
    They are not sponsored by an employer or relative in Australia.
    This group forms the largest component of skilled migrants each 
    For example, in 2004-2005, 41,180 independent visas were granted 
(including family members), representing 52 percent of the Skill 
Stream. See Fact Sheet 25, Skilled Categories, for more information.
    State/Territory Scheme.--The State/Territory Nominated Independent 
(STNI) Scheme enables State and territory governments to sponsor 
skilled migrants and their families in the Independent skilled 
category. For more details, see Fact Sheet 26, State/Territory Specific 
2. Employer Nomination
    Employers may nominate (or ``sponsor'') personnel from overseas 
through the following categories:

     The Employer Nomination Scheme (ENS) allows Australian 
employers to nominate workers from overseas for permanent entry to 
Australia when a position cannot be filled from within the local 
     The Regional Sponsored Migration Scheme (RSMS) enables 
employers in regional and low population growth areas of Australia to 
fill skilled vacancies that they have been unable to fill through the 
local labour market.
    The RSMS is one of several government initiatives designed to help 
State and territory governments in their efforts to boost development 
in regional Australia and less populated States/territories.
     A Labour Agreement enables Australian employers to recruit 
a specified number of workers from overseas in response to identified 
or emerging labour market (or skill) shortages. This is a formal 
arrangement negotiated between the Commonwealth Government and the 
employer or industrial association.
     In 2004-2005, 13,020 permanent residence visas were 
granted for Employer Nomination, RSMS and Labour Agreements. See also 
Fact Sheet 48--Assisting Skilled and Business People.
3. Business Skills Migration
    The Business Skills program encourages successful business people 
to settle permanently in Australia and develop new business 
    In 2004-2005, 4,820 business migration visas were granted to 
business people and their families. For more details, see Fact Sheet 
27, Business Skills Migration.
4. Distinguished Talent
    This is a small category for distinguished individuals with special 
or unique talents of benefit to Australia.
    The profiles of people who have been successful under this category 
generally include sports people, musicians, artists and designers, all 
of whom were internationally recognized as outstanding in their field. 
In 2004-2005, 190 visas (including family members) were granted under 
this category.
5. Skilled Australian Sponsored
    Skilled-Australian Sponsored category migrants are selected on the 
basis of their age, skills, qualifications, English language ability 
and family relationship. They must be sponsored by a relative already 
living in Australia.
    In 2004-2005, 14,530 visas were granted under this category. See 
Fact Sheet 25, Skilled Categories, for more detail.
    Further information is available on the department Web site: http:
    The department also operates a 24-hour national telephone service 
inquiry line, 131 881 for the cost of a local call from anywhere in 
    Fact Sheet 24, produced by the National Communications Branch, 
Department of Immigration and Multicultural Affairs, Canberra.
    Revised July 20, 2006.
     Commonwealth of Australia 2005.
                         25. Skilled Categories
    This fact sheet provides an overview of the requirements to be met 
by applicants for the General Skilled Migration (GSM) visa categories, 
which is one part of Australia's Skilled Migration Program.
    For an overview of the other categories within the Skill stream of 
Australia's Migration Program, see Fact Sheet 24--Overview of Skilled 
    More detailed information on the requirements and procedures for 
GSM visa applicants can be found on the department's Web site: 
    Australia's General Skilled Migration program is designed to 
attract young, highly skilled people, with a high level of English 
language ability who have skills in particular occupations that are 
required in Australia. These occupations are listed on Australia's 
Skilled Occupation List (SOL) which is available on the department's 
Web site, see Form 1121i.
    People applying for a General Skilled Migration visa will need to:

     be under 45 years of age at the time they apply (unless 
they have been invited to apply for a General Skilled Migration visa);
     have an occupation listed on the SOL;
     have their skills assessed as being suitable for this 
occupation by an organisation in Australia, known as the Relevant 
Assessing Authority;
     have a high level of English;
     have recent skilled work experience or have recently 
completed an Australian qualification as the result of 2 years full-
time study in Australia (required if applicant is applying from within 
Australia); and
     where applicable, meet the relevant passmark when assessed 
against the GSM points test.

    There are several types of visa classes within the GSM category.

    Skilled-Independent for people who do not have an Australian 
sponsor. Applicants must be outside Australia for the visa to be 
    Skilled-Independent Overseas Student for holders of an eligible 
student visa in Australia who have recently completed an Australian 
    Skilled-Independent Regional (Provisional) for people who are 
sponsored by a State or territory government agency and who are willing 
to live and work in regional Australia or a low-population growth 
metropolitan centre for at least 2 years.
    Skilled-Australian Sponsored for those who are sponsored by an 
Australian relative and have an assurer.
    Skilled-Designated Area Sponsored for those who are sponsored by an 
Australian relative who lives in a designated area and who have an 
    Skill Matching for people who meet the basic requirements for GSM 
but do not have the required period of work experience and English 
language ability. This visa can only be granted whilst the applicant is 
outside Australia.

    Skill Matching visa applicants' details may be placed on a Skill 
Matching Database which is distributed to State and territory 
governments and some regional authorities who may then nominate an 
applicant for migration.
Points Test
    For GSM categories, with the exception of the Skilled-Designated 
Area Sponsored and the Skill Matching visa classes, applicants must 
pass a points test.
    Applicants are awarded points for:

     English language ability
     Specific work experience
     Occupation in demand (and job offer)
     Australian qualifications
      Study and residence in regional Australia/low population 
growth metropolitan areas
     Spouse skills
     Relationship (for Skilled-Australian sponsored visa 
applicants only)
      State/territory sponsorship (for Skilled-Independent 
Regional visa applicants only)

    Applicants may also receive bonus points for one of the following:

     Capital investment in Australia; or
     Australian work experience; or
     Fluency in one of Australia's community languages (other 
than English).

    Applications which achieve a score below the passmark (but above 
another mark, known as the pool mark) will be held in reserve for up to 
2 years after it is assessed. If the passmark is lowered during this 
period and the applicant's score is at, or above, the new passmark, the 
application will proceed. If it is not, then the application will be 
    The pass mark changes from time to time. Applicants should check 
the department's Web site at http://www.immi.gov.au/skilled/general-
skilled-migration/points-test.htm for the current passmark.
Assurance of Support
    An Assurance of Support (AOS) is an undertaking to provide 
financial support to the person applying to migrate.
    Applicants applying for migration under the Skilled-Designated Area 
Sponsored or Skilled-Australian Sponsored categories must provide an 
AOS. Applicants applying under other General Skilled Migration 
categories may be requested to provide an AOS if it is determined that 
they are likely to access social security benefits within 2 years after 
their arrival to Australia. For more details, see Fact Sheet 34--
Assurance of Support.
Online Lodgement
    Applicants for a GSM visa that can be granted while in Australia, 
or an ``offshore'' Skilled-Independent Regional (Provisional) visa, can 
submit their visa application over the Internet.
    The eVisa facility provides the following services:

     Internet visa lodgement
     Internet payment facilities using credit card
     electronic document attachment facility
     facility to check the status of an application online

    Information on online lodgement is available at: http:/
    Further information is available on the departments Web site: 
    The department also operates a 24-hour national telephone service 
inquiry line, 131 881 for the cost of a local call from anywhere in 
    Fact Sheet 25, produced by the National Communications Branch, 
Department of Immigration and Multicultural Affairs, Canberra.
    Revised 9 August 2005.
     Commonwealth of Australia 2005.

                  Federal-Skilled Worker Selection Grid
                          Education                                25
University Degrees:
  Ph.D., or Masters AND at least 17 years of completed full-          25
   time or full-time equivalent study........................
  a two or more university degrees at the Bachelor's level            22
   AND at least 15 years of completed full-time or full-time
   equivalent study..........................................
  2-year university degree AND at least 14 years of completed         20
   full-time or full-time equivalent study...................
  a 1-year university degree AND at least 13 years of                 15
   completed full-time or full-time equivalent study.........
Trade or nonuniversity certificate or diploma:
  a 3-year diploma, trade certificate or apprenticeship \1\           22
   AND at least 15 years of completed full-time or full-time
   equivalent study..........................................
  a 2-year diploma, trade certificate or apprenticeship AND           20
   at least 14 years of completed full-time or full-time
   equivalent study..........................................
  a 1-year diploma, trade certificate or apprenticeship AND           15
   at least 13 years of completed full-time or full-time
   equivalent study..........................................
  A 1-year diploma, trade certificate or apprenticeship AND           12
   at least 12 years of completed full-time or full-time
   equivalent study..........................................
High school Diploma:
  Secondary school educational credential....................          5

                                  Official Languages      Maximum 24
1st Official language             High proficiency    4
                                   (per ability \2\).
                                  Moderate            2
                                   proficiency (per
                                  Basic proficiency   1 to maximum of 2
                                   (per ability).
                                  No proficiency....  0
                                  Possible maximum    16
                                   (all 4 abilities).
2nd Official language             High proficiency    2
                                   (per ability).
                                  Moderate            2
                                   proficiency (per
                                  Basic proficiency   1 to maximum of 2
                                   (per ability).
                                  No proficiency....  0
                                  Possible maximum    8
                                   (all 4 abilities).

                          Experience                               21
1 year.......................................................         15
2 years......................................................         17
3 years......................................................         19
4 years......................................................         21

                             Age                                   10
21-49 years at time of application...........................         10
Less 2 points for each year over 49 or under 21

                Arranged Employment in Canada                      10
HRSDC confirmed permanent offer of employment................         10
Applicants from within Canada and holding a temporary work
 permit that is:
  HRSDC opinion obtained, including sectoral confirmations...         10
  HRSDC opinion exempt under an international agreement,              10
   significant benefit (e.g. intracompany transferee) or
   public policy (e.g. post-graduate work)...................

                         Adaptability                              10
Spouse's/common-law partner's education......................        3-5
Minimum 1-year full-time authorized work in Canada \3\.......          5
Minimum 2-year full-time authorized post-secondary study in            5
 Canada \3\..................................................
Have received points under the Arranged Employment in Canada           5
Family relationship in Canada \3\............................          5
  Total......................................................    Maximum
              Pass mark as of September 18, 2003: 67 points
\1\ ``Diploma, trade certificate or apprenticeship'' refers to a post-
  secondary educational credential other than a university educational
\2\ Applicants are rated on the ability to speak, listen, read or write
  Canada's two official languages.
\3\ Applies to either principal applicant or accompanying spouse/common-
  law partner.
HRSDC: Human Resources and Skills Development Canada.

    [Whereupon, at 12:29 p.m., the hearing was adjourned.]