{"text":[[{"start":6.64,"text":"The US is making the immigration of skilled workers more expensive; the UK is exploring ways to make it cheaper. It is tempting to conclude that one of them must be wrong. But which?"}],[{"start":20.38,"text":"President Donald Trump’s eye-catching proclamation that $100,000 will be added to the cost of new H-1B visas (which are granted temporarily to skilled workers) raises two separate questions. The first is, because most voters seem to have a strong desire to limit immigration, are fees a good way to do that?"}],[{"start":44.519999999999996,"text":"There are other systems. A government could limit the number of visas, and allocate them by lottery. This is the current US system, and a modified lottery will continue to apply if there is still enough demand at the new price. Or it could use some kind of “points-based” allocation, trying to figure out what kind of people it would like to admit — people with family already in the country, people of the right age, people with the right qualifications, people with the right experience."}],[{"start":77.75,"text":"These approaches have some superficial appeal, but also hidden problems. Any system with a fixed quota will disrupt businesses, which can never be sure whether recruitment from overseas will be snarled up or not. And while a lottery is simple and transparent, it gives the same chance to a promising young professional as to a truly exceptional achiever."}],[{"start":102.98,"text":"A points system sounds attractive, but countries that have tried the idea have often found it unwieldy, complex and either inflexible or full of strange carve-outs. Economist Alan Manning, author of the forthcoming book Why Immigration Policy Is Hard, notes wryly that when the chair of the UK’s Migration Advisory Committee floated the idea of auctioning off citizenship, it was the immigration lawyers who were most outraged. Incomprehensible systems create a lot more work for lawyers, after all."}],[{"start":139.71,"text":"For those not providing legal advice to would-be immigrants, the price mechanism does have some appeal."}],[{"start":146.61,"text":"Allowing applicants to buy visas (either in an auction or at a fixed price) means that immigrants — or their employers — can guarantee a visa if they are willing to pay enough. Like lotteries, the system is simple and transparent. And unlike a lottery or a points system, selling or auctioning work visas could raise a considerable sum of money."}],[{"start":173.41000000000003,"text":"The late Gary Becker, who won the Nobel memorial prize for economics back in 1992, used to argue that — provided there was some kind of loan system allowing applicants to pay off the fee gradually — more attractive candidates for immigration would be more likely to bid: younger, better educated, ambitious people committed to making a success of life in the US would be willing to pay more than anyone whose heart wasn’t really in the idea."}],[{"start":202.85000000000002,"text":"Becker added, “Political refugees and those persecuted in their own countries would be willing to pay a sizeable fee to gain admission to a free nation. So a fee system would automatically avoid time-consuming hearings.” I’m not sure I would be willing to let the price system rip to quite such an extent, but you can make up your own mind."}],[{"start":null,"text":"
"}],[{"start":226.70000000000002,"text":"Would voters tolerate a visa auction? It’s hard to say. Letting people buy their way in seems grubby and negligent — but on the other hand, immigration sceptics might be much less worried if they knew that most immigrants had paid $100k or more to be in the country."}],[{"start":247.13000000000002,"text":"The second question is: if we did sell work visas, how much should we charge? And here things get really interesting. There’s a useful piece of economic jargon in this context — substitutes and complements. Left shoes are complements for right shoes. Smartphones are complements for smartphone apps. Cornflakes are complements for milk, but substitutes for Shreddies. Coffee and tea are substitutes for each other."}],[{"start":276.18,"text":"The idea is intuitive enough. So, what are skilled immigrants substitutes and complements for?"}],[{"start":284.51,"text":"One view is that they are substitutes for skilled, native-born workers, and that large employers use the H-1B visa to suppress skilled wages by bringing in skilled migrant workers — such as consultants or programmers from India — and paying them less than the going rate in the US."}],[{"start":305.40999999999997,"text":"I’m a little sceptical of the evidence for this view, which seems to compare domestic wages, averaged across all levels of experience, with entry-level wages for new H-1B recruits. But it’s certainly not absurd."}],[{"start":319.30999999999995,"text":"According to the Economic Policy Institute, a think-tank, outsourcing firms such as Cognizant, Deloitte and Tata have been heavy users of H-1B visas. Outsourcing is a perfectly legitimate business, but we are not talking about exciting AI or biotech start-ups here. High fees on H-1B visas would certainly lessen the temptation to use them as a source of cheap labour, although they might simply encourage offshoring labour entirely."}],[{"start":350.3999999999999,"text":"Enthusiasts for the H-1B visa have a different view: that skilled immigrants are complements for the talents of the workers who are already here. It is striking that the bosses of Microsoft, Alphabet and Tesla — Satya Nadella, Sundar Pichai and Elon Musk — have all held H-1B visas."}],[{"start":371.68999999999994,"text":"There is some evidence for the idea that skilled immigration is good for the native population. One study found that start-up firms “with higher lottery win rates are more likely to receive additional venture capital funding and to have a successful exit via an IPO or acquisition”."}],[{"start":391.5199999999999,"text":"Another used the fluctuations in the number of H-1B visas issued from year to year to determine that by allowing the immigration of qualified scientists, mathematicians and engineers, the programme caused “significant wage gains for college-educated natives”, as well as boosting productivity and even wages for native workers without a college degree."}],[{"start":417.3599999999999,"text":"All this suggests that if the US wants to put a price on skilled visas, that price should be low. The only difficulty is adverse selection: that the lower the price, the less excellent the pool of applicants is likely to be. The US might want millions of the kind of person willing to pay $100,000, yet reasonably fear that cutting the fee would rather dilute the talent of the people who applied."}],[{"start":446.5399999999999,"text":"Immigration policy is, as Alan Manning says, hard. But what a privilege to be born into a country that people would pay a small fortune to live in."}],[{"start":457.7699999999999,"text":"As for the right system to choose those people? It is, in football parlance, “a selection headache”. There are worse problems to have."}],[{"start":467.4599999999999,"text":"Find out about our latest stories first — follow FT Weekend Magazine on X and FT Weekend on Instagram"}],[{"start":475.8999999999999,"text":"Letter in response to this column:"}],[{"start":478.37999999999994,"text":"America’s plan for skilled visas is already happening / From Barry O Donovan, Dublin, Ireland"}],[{"start":492.79999999999995,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1761047342_4687.mp3"}