The U.S. Can't Afford to Scrap the Visa Lottery

Two weeks ago, President Obama called on Congress to turn its attention back to immigration reform. Lawmakers have instead found other things to keep themselves occupied–pillorying Kathleen Sebelius and the intelligence services, among them—and the prospects for immigration reform remain dim. For those who believe the U.S. should be encouraging more immigrants, not less, there’s a small silver lining to Congressional inaction. Although the proposed legislation would have had a considerable net benefit, it also might have ended one of the most innovative and economically effective migration policies America has: the diversity lottery. Now that reform efforts are on hold, lawmakers have a chance to preserve it.

The overall benefit of immigration–skilled and unskilled alike—is big. It’s associated with more jobs, more innovation, and more wealth. But in his new book on the topic, Exodus: How Migration Is Changing Our World, Oxford University Professor Paul Collier makes the claim there may be a negative impact of too many immigrants arriving from one particular country–because it makes it easier for even more to come from the same country (they have friends to stay with when they arrive) and because large diaspora communities are slow to integrate. That, in turn, could lead to a weakened social contract, eroding trust and policies of redistribution.

There isn’t much evidence to support that fear. University of California, Davis economist Giovanni Peri and Francesc Ortega from the City University of New York have looked at the data [PDF] and find no evidence that migration levels are associated with weakened institutions or greater income inequality. Even so, for those still concerned by Collier’s conjecture, the answer is a diversified immigrant pool–ensuring new arrivals come from as many different countries as possible.

There’s evidence that a more diverse immigrant pool may even bolster the benefits of immigration. A new paper [PDF] by Alberto Alesina and colleagues from Harvard University suggests populations with a diverse stock of first-generation migrants see significant economic benefits. Building on previous studies suggesting companies with more diverse management gain higher market share and profits, the authors similarly find that countries with more diverse foreign-born populations have more patents granted each year and higher overall incomes.

Alesina and colleagues do suggest that the migrants with the biggest positive impact are college-educated and born in reasonably rich countries with an “intermediate level of cultural proximity,” as they put it (think of it as the distance from classical music to the Beatles rather than classical to thrash metal). Nonetheless, the relationship between immigrant diversity and output holds across all skill levels and countries of origin. Moving from a foreign-born population that looks like the one in Ireland (where the majority of new immigrants come from next-door England) to one that looks like the U.S.’s (with a stock of foreign-born that comes from many countries) increases long-term income per capita by 20 percent to 50 percent, Alesina suggests.

This finding suggests that immigration reforms in rich countries might want to embrace diversity as a specific goal. The visa lottery program in the U.S., slated for extinction in proposed immigration reform legislation because of concerns related to terrorism and the idea that immigration shouldn’t be based on nationality, is a great example. It gives citizens of countries with fewer than 50,000 immigrants to the U.S. over the past five years the opportunity to enter a lottery for a work permit based solely on a high school education or two years of training in a job skill. This program should be expanded, not extinguished. Similarly, the U.K.’s “points system,” which determines who gets a visa, should give extra points to applicants coming from underrepresented source countries.

For both Collier’s U.K. and Alesina’s U.S., there’s no shortage of untapped countries from which to draw new migrants. There are 126 countries and territories worldwide with a stock of migrant nationals in the U.K. less than 1,000 strong. They include Albania, Nicaragua, Honduras, Mexico, the Philippines, Vietnam, Indonesia, and Liberia. Alesina’s analysis suggests such immigrants will significantly help the economy; and even in Collier’s darkest imaginings, it seems doubtful that, say, a Honduran population in the U.K. double or triple its current size would be able to overturn valuable cultural institutions like the great English breakfast or the royal family.

Or what about the U.S.? There are 80 states and territories from which fewer than 5,000 people–considerably less than 0.002 percent of the U.S. population–have migrated to America. They include Bhutan, Mongolia, Djibouti, Gabon, Rwanda, Benin, Namibia, Kazakhstan, Swaziland, Madagascar, and Mauritius. Let’s open the doors wide to anyone who wants to emigrate from those countries–or at least encourage them to apply for the lottery. “Give me your huddled masses” turns out to be the most effective strategy for economic growth that we have. It’s time to source those masses from more suppliers.