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Legal Aliens: Toward a Positive
Immigration Policy

Barry R. Chiswick

Barry R. Chriswick is research professor in the
department of economics, University of Illinois at Chicago.

For the past decade the public debate on immigration policy has been dominated by the perceived need to control illegal immigration. With the passage of the landmark Immigration Reform and Control Act of 1986, which provides amnesty for certain illegal aliens and penalties against employers who hire illegal aliens, this debate has, at least temporarily, come to an end. Public policy discussions regarding immigration should now turn to the criteria used in the admission of the roughly 600,000 aliens granted permanent resident status each year.

The United States admits legal immigrants for two primary reasons. The first is humanitarian. To aid those in distress, we accept refugees-persons with "a well-founded fear of persecution" for political, racial, religious, and other reasons. We also accept the immediate relatives of U.S. citizens; it pains us to allow political boundaries to separate parents from young children and husbands from wives.

The second reason is economic. One function of immigration over the years has been to promote US economic growth by expanding the human resources base and by responding to periodic shortages of particular skills.

Unfortunately, current US policy for issuing non-refugee immigrant visas advances neither equity nor economic growth. Little effort is devoted to is covering the value of the visa to the immigrant, or the potential value of the immigrant to the United States.

Current Policy

The current system for regulating the flow of legal immigrants is based on the Refugee Act of 1980 and on the 1965 Amendments to the Immigration and Nationality Act of 1952. In spite of periodic criticism of the way in which the Refugee Act has been implemented, particularly with regard to Central Americans, there is general agreement that the law has put US refugee policy on a sounder, fairer, and more humanitarian footing. On the other hand, US Policy regarding non-refugee immigrants is Troubling. These visas are issued largely on the basis of kinship with a US citizen or resident alien, with very little weight given to an applicant's likely contribution to the US economy.

According to data compiled by the Immigration and Naturalization Service, which is summarized in the table below, of the 601,708 persons who received immigrant visas in fiscal year 1986, only 23,162-or a mere 3.8 percent of the total-were admitted on the basis of their skills, under the third and the sixth preferences. Of these, 11,763 were admitted as "professional or highly skilled immigrants" and 11,399 were admitted as "needed skilled or unskilled workers." These immigrants were accompanied by 30,463 spouses and minor children, for a total of 53,625 immigrants.

Individuals admitted under occupational preferences are a key source of skilled immigrant workers. Of the 8,389 engineers who immigrated to the United States in 1986, 40 percent were occupational-preference recipients, as were 40 percent of the 1,315 natural scientists, 52 percent of the 1,042 mathematical and computer scientists, 28 percent of the 4,619 nurses, and 38 percent of the 2,717 college and university teachers. These people contribute to our effort to remain at the cutting edge in the development and implementation of new technology, thereby creating employment opportunities for less skilled workers. They help staff our hospitals and nursing homes, particularly in the less advantaged inner-city neighborhoods, and they teach in our colleges and universities, thereby contributing to the development of a more highly educated population.

The Past vs. the Present

Current immigration policy places too much emphasis on kinship as the basis for rationing non-refugee visas. This emphasis dates to the 1965 amendments, which were enacted during a period when economic conditions were very different than they are today. In the mid-1960s, we had unprecedented productivity growth, shrinking unemployment, rapidly expanding real GNP per capita, and low and declining real energy costs. Most important, Americans believed all of these trends would continue indefinitely. In such an environment it might have been appropriate to downplay economic considerations in formulating immigration law, and to expand the scope for immigration based on kinship with a US resident. The result, however, is no longer relevant to our nation's economic situation. The slow rate of economic growth and the country's declining position as a world leader in technology and international competitiveness require a rethinking of all policies, including immigration.

Current immigration policy places too much emphasis on kinship as the basis for rationing non-refugee visas.

There is another way in which the past differs from the present. There was a time, not too many years ago, when immigration to the United States was a gut-wrenching experience. It meant the virtual severance of all ties with family members who remained behind. That is no longer the case. The real costs of transportation and communication have plummeted. It is now relatively inexpensive in both time and money to fly to Europe, Asia, or any place in Latin America. Thanks to modern technology, international telephone communication is quick, clear, and cheap. And although postal services in every country are charged with being slow and inefficient, this is largely because our rising expectations out-distance their performance. Furthermore, the United States and most of the countries from which the United States receives immigrants have very few restrictions on nationals from one country visiting another. This has become a small world in which family ties can be maintained with relative ease even when family members live in different countries or even different hemispheres. These developments call into question the need, and the wisdom, of some of the kinship categories in the preference system.

Rationing Visas

Currently the number of visas issued each year by the United States is far less than the number of visas demanded. A non-price rationing scheme, based primarily on kinship, is used to allocate the limited number of visas among applicants. Those with a relative in the United States have a far better chance of obtaining a visa than do other equally meritorious-and possibly more productive-individuals. This creates real inequities among potential visa applicants, and undermines the potential value of immigration for bolstering US productivity.

As shown in the table above, in fiscal year 1986, 24,837 brothers and sisters of US citizens migrated to the United States under the "sibling of a US citizen" preference category-7 percent more than the number admitted on the basis of skills. These siblings were accompanied by 15,321 spouses and 30,243 children, for a total of 70,401 immigrants. This compares with the total of 53,625 immigrants admitted under the occupational preferences.

Key Provisions of US Immigration Law and Numbers of Immigrants Admitted
Immigrants Subject to Numerical Restriction Number of Immigrants admitted in 1986  
Category Preference Principals Spouses/Children Total Limita
Unmarried adult children of US citizens
Spoused and unmarried children of permanent residents
72,000 (26%) plus any visas not used above
Professional or highly skilled persons
27,000 (10%)
Married children of US citizens
27,000 (10%) plus any visas not used above
Siblings of adult US citizens
64,700 (24%) plus any visas not used above
Needed skilled and unskilled workers
27,000 (10%)
Non-preference includes investors
Any visas not used above
270,000 (100%)
aThe annual limits on US visas in all preference categories are 270,000 worldwide, 20,000 per country.
bTotal admitted in a year may differ from numerical limitation because of unused visas and timing of entry. Source: US Department of Justice, 1986 Statistical Yearbook of the Immigration and Naturalization Services.

The important question from the standpoint of public policy is how to allocate immigration visas to accommodate both the humanitarian and the economic objectives. For the purposes of this discussion, it is assumed that adult citizens of the United States will be able to bring to this country their bona fide spouses, minor children, and aged parents without numerical limit, and that refugees will be treated separately, as under current law.

Immigrants Not Subject to Numerical Restrictions      
Spouses, parents, and minor children of adult US citizens 223,468 0 223,468
Refugees and asylees 74,960 29,423 104,383
Other 5,028 1,861 6,889
Subtotal 303,456 31,284 334,740
TOTAL 462,212 139,496 601,708

A Skill-based System

One alternative is to ration visas on the basis of labor market skills. Such skills might include any of a number of characteristics demonstrated to enhance an individual's likely productivity in the United States.

The multidimensional aspects of skills can be combined into a single index for rationing immigration visas by a point system. A list of readily measurable characteristics that are expected to enhance the productivity of immigrants could be developed, and points could be assigned for each characteristic to reflect the applicant's traits. Points might be awarded for each level of schooling completed; for knowledge of English; or for apprenticeship training, vocational training, or relevant on-the-job training. They might also be awarded if the visa applicant were to be accompanied by a spouse with a high level of skill.

In addition, the system could award points for plans to invest in and manage a US business. This would provide a clear recognition of the importance of new investment to creation of jobs for US workers. Of course, any funds invested in the United States could be withdrawn after the immigrant received resident alien status, and this would have to be recognized in the design of the point system.

It is interesting to note that the 1965 amendments provided for the immigration of investors ("entrepreneurs"). The law put investors in the "residual non-preference" category. Unfortunately, as a result of a large increase in the demand for visas by the siblings of US citizens, there have been no residual visas issued since 1978, and hence no investor immigrants.

A point system could also be designed to recognize the value of relatives already in the United States. A small number of points could be awarded, for example, to applicants with close relatives who will guarantee their financial support for a period of, say, five years. In this manner, applicants who fall short of the general productivity criterion by a few points, but who would be of considerable value to their relatives in this country, would still be able to immigrate legally. Under current law, sponsors have no responsibility for their immigrant relatives, and as a result, there is no meaningful test of the value they place on their immigration.

To be broadly viewed as fair and equitable, this scheme should not award points on the basis of race, religion, ethnicity, or country of origin. In fact, the current ceiling on the number of visas that can be awarded to citizens of any particular country-20,000 numerically restricted visas per year-should be removed. This ceiling discriminates against applicants from countries with large populations and countries where a large proportion of the population wishes to migrate to the United States. In recent years, the ceiling on immigration has been binding for Mexico, China, India, Korea, the Philippines, and the Dominican Republic.

Under a point system, the total number of non-refugee immigrants would be regulated by adjusting the point requirements for a visa. A threshold number of points would be determined for each year or period of years based on economic conditions in the United States. This procedure would permit the tailoring of immigration to prevailing economic circumstances, which is not now possible. Applicants who met the point requirements would receive visas for themselves and for their spouses and minor children.

Canada, Australia, and New Zealand have all adopted point systems for rationing immigration visas. The result has been an increase in the skill level of immigrants and a broadening of the range of countries from which the immigrants arrive. Various "non-traditional" sources of immigration have now become prevalent. For example, Asian immigration to Australia and Canada has increased from trivial numbers in the l950s to more than 40 percent of immigrants in the l980s.

The US experience with the occupational preferences is also instructive. Immigrants entering the United States under these preferences have higher skill levels than other immigrants. In addition, migration streams have been opened to people (primarily from Asian countries) who would otherwise have had little hope of immigrating because they did not have close relatives in the United States. This opening of new migration streams was most pronounced in the decade immediately following the 1965 amendments.

Visa Fees

Another approach, one that has a natural appeal to economists, is to "sell" or "lease" immigrant visas. The idea is to raise the money price of visas until the number of applicants more closely approximates the number of available visas.

Under current law, individuals who are lucky enough to obtain visas because they have relatives in the United States receive large windfall gains that are denied others. These economic rents accrue because of the limitations placed by the United States on total immigration and the absence of an effective system of rationing by price. Greater equity among visa applicants, and between immigrants and the US population, could be achieved by replacing kinship criteria with a direct immigrant visa fee. The fee could be paid in a lump sum by either the applicant or the applicant's US relatives. A fee-based system would enable US citizens to capture some of the economic rents now accruing to immigrants.

There are two potential problems with visa fees, neither of which is insurmountable. First, because of capital market imperfections, some applicants may have difficulty borrowing to pay the fee, even though migration to the United States would be an efficient investment. Second, a one-time, up-front fee would tend to discourage migration for temporary or uncertain durations, unless the fee were partially refundable when the alien left the country. Both of these problems can be solved by annualizing the fee as a surcharge on the federal income tax. Aliens who are not working, who are without taxable sources of income, and who have no willing sponsors would be subject to deportation.

The investor provision in the US immigration law, and similar provisions in the laws of other major immigrant-receiving countries, are indirect ways of rationing visas by price. A more open and explicit price mechanism, operated on a much larger scale, would be less likely to distort investment decisions.

Immigration Policy and the Family

Some may argue that an immigration policy based on the applicant's potential contribution to the US economy-either through a skill-based system or visa fees-is "anti-family." This is not the case. Immediate relatives of adult US citizens (spouses, minor children, and aged parents) would be eligible for admission without a fee and without numerical restrictions. For other applicants, relatives in the United States could assist immigration by accepting the financial responsibility of serving as sponsors, financing the applicant's acquisition of skills, financing the immigrant visa fee, and arranging employment. The willingness of US citizens and resident aliens to engage in these activities would provide a good test of the value they place on the immigration of their relatives.

Nepotism and Immigrant Origins

Differentiation on the basis of kinship is a feature unique to immigration law in this country. Nowhere else in US economic or social policy does official nepotism take center stage over evaluating an individual on the basis of his or her own characteristics and behavior. It is a policy that is fundamentally contrary to US traditions, as well as to this country's self-interest.

Basing immigration policy on the applicant's contribution to the US economy does not, as some might believe, tend to favor European immigrants. Skill-based systems, such as occupational preferences in the United States and point systems in Australia and Canada, have opened immigration channels for applicants from ethnic groups and countries of origin which, for one reason or another, had not been present in previous immigration streams. In each of these instances, the shift to issuing visas on the basis of skill has tended to favor Asians rather than Europeans.

A First Step

In an impressive bipartisan action in March 1988, the Senate passed, by an overwhelming margin, an immigration reform bill (S. 2104) that would revise the legal system for rationing visas. The bill would create two new categories of non-refugee immigrants-"selected immigrants" (55,000 visas per year) and "investors" (5,000 visas per year)-and reduce the number of visas for the siblings of US citizens (to 22,000 annually, with a temporary allotment of 30,000 additional visas to reduce the backlog). Selected immigrants would be identified through a point system, with points awarded on the basis of age, schooling, relevant work experience, and English-language skills. The investor category would provide visas for those who invest at least $1 million in an enterprise that creates at least 10 new jobs.

The bill represents the first small, tentative step in reducing the overriding importance of kinship and increasing the role of individual productivity characteristics in rationing immigration visas. Unfortunately, the House has not yet taken action on the bill.


Many people who immigrate to the United States each year on the basis of kinship criteria would not qualify on the basis of productivity criteria. The immigration of these less productive workers is at the expense of the US population. The largest adverse impact may be borne by low-skilled or socially disadvantaged Americans, who face greater competition in the labor market and in the allocation of income transfers. An immigration policy based on productivity would reverse this pattern. By increasing the overall skill level and hence the productivity of immigrants, the overall economic impact of immigration would become more favorable. Greater public support for increasing the annual level of immigration would likely follow.

Selected Readings

Cafferty, Pastora San Juan, Barry R. Chriswick, Andrew Greeley, Teresa Sullivan. The Dilemma
    of American Immigration: Beyond the Golden Door
. New Brunswick: Transaction Books,    1983.
Chriswick, Barry R. "Is the New Immigration Less Skilled Than the Old?" Journal of Labor     Economics (April 1986).
--. "Immigration Policy, Source Countries and Immigrant Skills: Australia, Canada and the United     States," Conference on the Economics of International Migration, Canberra, April 1987.
US Department of Justice. Statistical yearbook: Immigration and Naturalization Service,
     various years.

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