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Immigration and Education

Ray Marshall, Secretary of Labor in the Carter administration is a distinguished labor economist - and personal friend - who long ago decided that education is perhaps the most important key to broadly shared prosperity in modern industrial economies.  So he has spent a lot of his time over the last three decades working to understand what policies make for effective national education systems.  More recently, he has turned his attention to national immigration policy.  Some might see this as switching fields, but not Ray.  As far as he is concerned, if the aim is broadly shared national prosperity, education policy and immigration policy are two sides of the same coin.

To see why, we can look at the experience of Australia and Canada.  Ray points out that both countries long had immigration policies like those that the United States has now, strongly favoring immigration of people who have family connections in the host country.  But then both countries realized in the 1980s that the terms of international trade were changing, and the only way they could avoid a steady downturn in their standard of living was to compete with other countries on the basis of improved productivity, higher quality and more creativity.  The key to all three was the quality of their labor force--the education and skills of their people.

Obviously, the skills of a national workforce depend importantly on the quality of the national education system and both countries worked hard and successfully on that.  Both are now among the top ten countries in the world on the OECD PISA league tables.

But all of the industrialized countries are now facing a long and sometimes steep fall in their birth rates.  Most are looking at birth rates well below what is required to replace their current population.  If they do not want their economies to contract, they will have to rely on a steady increase in immigration.  Australia and Canada realized that it would do them little good to have top quality education systems for their native born population if their immigrants were poorly educated.  The benefits of their education policies would be offset by the problems caused by their immigration policies.  That's because immigration policies based on family connections tend to bring in relatively uneducated immigrants.  That is certainly true in the United States.

But it is not just the low education levels and poor skills of the adult immigrants that are a problem. If the adults are uneducated, their children will likely be uneducated, too.  So a family based policy of the sort that the United States now has will tend to result in large numbers of uneducated youngsters coming in to that nation's schools, many of them unable to speak the language that is spoken in the schools.  So family-based policies not only make it less likely that a nation with such policies will enjoy broadly shared prosperity, but it will also make it less likely that future generations will enjoy broadly shared prosperity.  And it does not end there.  Both the Canadians and the Australians realized that their family-based immigration policies were leading to rising numbers of people--old and young--on their welfare roles.  Not only were uneducated immigrants less likely to succeed in the economy, they were also more likely to be a drag on the economy by adding to the welfare roles.

So they changed their policies to emphasize education levels rather than family connections.  That worked better, but not well enough.  In many cases it produced taxi drivers or welfare recipients with doctoral degrees.  Economists had predicted that people with higher degrees would be more flexible than those without them and would readily adapt to whatever conditions they encountered.  Not so.  It turned out to be important to make sure that the specific skills of the immigrant matched the skills needed by employers.  And it was no less important that the immigrant be fluent in the host country language.  Interestingly, immigrants with strong technical skills in high demand--even if they were below the four-year degree level--did just as well or better than those with four year or higher degrees whose skills were not in high demand or who did not speak the native language well.  It also turned out that immigrants with strong relevant skills who brought in other family members with strong relevant skills did a lot better than those who had strong relevant skills themselves but whose other family members were lacking in such skills.

Years earlier, the Canadians had developed a system of making immigration decisions on individual applications based on the number of points they accumulated on their point system.  The Australians adopted that system.  Both countries conducted extensive research on the characteristics of the immigrants and the experiences of those immigrants in their economy.  It was that data that produced the kinds of findings I just shared with you.  These data systems have enabled both countries to continually fine tune their systems, changing their policies to select immigrants who, based on their research, have the best chance of succeeding in the Australian and Canadian economies and the smallest chance of turning into welfare recipients.

Ray calls such a system Value-Added Immigration.  That is, I think, a good name.  It is based on an estimate of the value that the immigrant will be able to add to the services he or she renders and the products that he or she makes.  The stronger that person's education and the stronger the skills, the more value that person can add to the economy.  In this sense a Value-Added Immigration policy contributes to a Value-Added economic strategy, a competitive strategy based on the value that the entire national workforce can add to the products it makes and services it renders.  A century ago, it was enough to bring in people with strong backs and willing hands.  In today's world, though, that is no longer enough.

Immigration, of course, is an inflammatory political issue here in the United States and in Europe, both because immigrants are seen by some as bringing alien cultural values into the host country and because many workers, especially low-income, low-skill workers, see immigrants as taking away their jobs and lowering their wages because they are willing to work for so much less.

The Canadians and Australians have solved the problem of cultural clashes by requiring their immigration applicants to sign a statement acknowledging that the host country embraces certain values--from the rule of law to the equality of men and women--that they expect the immigrants to accept and abide by.  The statement requires the applicant to acknowledge that a refusal to accept those values is grounds for deportation.  Few if any have been deported on these grounds, but the very act of signing the contract has evidently been enough to quell any substantial problems on this front.

The tensions caused by the tendency of family-based immigration policies to produce a flood of low-skill competition for the host country's low-skill citizens are alleviated by moving to a policy giving the most points to applicants with high skills whose skills are in the jobs with the greatest shortages.  Designing the point system this way means that the people coming in are likely to complement the skills of the people already in the country, and not lead to direct competition between the immigrants and the natives for the same jobs.

So, although both Australia and Canada have very high rates of immigration, we don't see in either country the same kinds of political controversy around immigration that we see in the United States or Western Europe, neither of which have value-added immigration policies.  

One of the most interesting aspects of immigration policy has to do with temporary workers.  Many years ago, the United States started to bring Mexicans into our country to fill the need for temporary agricultural labor, mainly to pick crops.  Germany did much the same thing in the boom years after World War II, bringing in low-skill workers from Turkey.  What the world learned from this is that temporary workers are never temporary when they come from countries where conditions are very difficult into modern industrialized countries.  They have children in the host country who are not citizens of the countries from which their parents came.  The parents find ways to go underground when their permits run out.  They end up driving down the wages of low-skill natives or putting them out of work altogether and driving up the costs of welfare services.

So, when Canada and Australia created their value-added immigration policies, they stopped bringing in temporary workers.  But that led to an important issue with respect to foreign students in their higher education systems.  They realized that one of the best sources of highly educated and skilled immigrants would be the foreign students graduating from Canadian and Australian universities.  They were fluent in the language, comfortable with the national values, and often had skills the Canadians and Australians were looking for.  So now, these countries have what they think of as a two-stage immigration system for foreign students.  In the first stage, these students are admitted for study on a temporary basis.  In the second stage, they apply for permanent residency as immigrants on an expedited basis.  This policy not only provides these two countries with an excellent source of highly skilled future citizens, but it makes them more attractive in the global market for higher education.

I've only hit the highlights of the characteristics of value-added immigration systems here.  If you would like to learn more, I suggest you get a copy of Secretary Marshall's book, Value-Added Immigration, from the Economic Policy Institute in Washington, DC.
But I would also hope that you might get involved by working to get the United States to start moving in this direction.  Educators have a lot at stake here.  We have our work cut out for us to bring our native-born students up to world-class standards, a goal we are far from achieving now.  But that goal will recede steadily into the distance, getting ever more difficult to achieve, if we continue with this country's current immigration policies, as more and more children enter this country who are not fluent in English and whose parents have very little education and low skills.  It is time, I think, as the Australians and Canadians already have, to make education policy and immigration policy "two sides of the same coin."
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