An alternative approach to immigration policy: Rationing by skill

Current U.S. immigration policy places a heavy emphasis on kinship ties with a U.S. citizen or resident alien in rationing immigration visas. An alternative policy is to focus on the skills of visa applicants. Immigrants with higher levels of schooling and with skills that are more readily transferable to the U.S. labor market are more productive, as measured by their earnings. A larger proportion of skilled workers in a cohort of immigrants tends to narrow the differences in earnings among skill groups in the native-born population. This reduces income inequality and reduces the use of income transfers by the low-skilled native-born population. More highly-skilled immigrants also make less use of income-contingent transfers. A point-system would be necessary to combine the multidimensional aspects of skill. The adoption of skill-based rationing with a point system in Canada led to an increase in the skill level of the immigrants.