Tag: haiti

Haitian Guest Workers Overstayed Their Visas Because the Government Cancelled the Program for Them

The Trump Administration recently ordered the Department of Homeland Security (DHS) to stop issuing H-2A visas for temporary agricultural work to Haitians.  One of the reasons given for not allowing Haitians to use the visas was their high overstay rate of about 40 percent in 2016, meaning that about 40 percent of Haitian workers on the H-2A did not leave at the end of the season as they were supposed to.  Depending exactly how overstay rates are calculated, they normally range from about 1 to 3.5 percent for workers on H-2A visas. 

One reason the H-2A overstay rate is so low is that workers have an excellent chance of coming back year after year if they abide by the rules of the program but, if they overstay or otherwise break the rules, then their chance of earning the visa in the future drops to near zero.  However, if the chance of coming back in future years is low because the government could cancel the program then many rational Haitian workers would choose to overstay.  That is likely what happened in the example of the Haitian H-2A visa workers.

Economists Michael Clemens and Hannah Postel wrote a preliminary impact evaluation in February 2017 of allowing Haitians to use the H-2A visa.  The government granted only a handful of Haitians visas to work in the United States in 2015 and 2016.  Clemens and Postel report that all of the workers in 2015 returned to Haiti as scheduled.  They wrote:      

As they vetted potential participants, association leaders were aware that continued participation in the program would be jeopardized if a substantial number of workers overstayed their visas. In the event, all of the workers who traveled returned as scheduled.       

Clemens and Postel didn’t mention the overstay rate for the Haitians who entered in 2016 as that data wasn’t available yet (they were writing the paper in 2016).  But if the reports are true that the Haitian H-2A overstay rate jumped to 40 percent in 2016, then it is likely that the workers suspected that the program was going to be canceled under the next administration and that this was their only chance to stay in the United States.  The expected loss in lifetime income from the possibility that Trump would win and shut down the program was so great that 40 percent of them decided to take their chances in the black market and scuttle any future chance that they would receive another legal guest worker visa.

This is a wonderful example of how government actions have unintended consequences.  Haitians are rational economic actors.  If the goal is to keep overstay rates low, then the government needs to make it easy for migrants to earn visas today and to credibly commit to issuing them in the future.      

Hope and Dismay about Haiti’s Future

Nicholas Kristof provides “a useful reminder of the limitations of charity and foreign aid” in his New York Times op-ed about Haiti today. “Nearly a year after the earthquake in Haiti,” he notes, “more than one million people are still living in tents and reconstruction has barely begun.”

He emphasizes the importance of “trade, not aid” and of the role of business: “It’s hard to think of a charitable project that will be as beneficial as the Coca-Cola Company’s decision to build up the mango juice industry in Haiti, supporting 25,000 farmers.”

He also cites a seemingly successful microfinance aid project that lends money to poor women in Haiti to begin and expand business ventures by, for example, investing in livestock or growing fruit for sale. It is impossible to evaluate the record of that organization based on the anecdotes Kristof provides, but, while microcredit may for a time alleviate the conditions under which poor recipients live (and be successful at pulling some recipients out of poverty), there is little evidence from its overall record that microcredit effectively reduces poverty. It is certainly not a way to reduce poverty on a widespread or sustainable basis. David Roodman of the Center for Global Development notes, for example, that “microfinance institutions in Haiti only reach perhaps 250,000 people, about 2.5% of the population.” (For a critique of some of the claims of microcredit proponents see Thomas Dichter’s Cato study.)

In line with Kristof’s main argument and with decades of evidence of successful countries around the world, the most effective way to reduce poverty in economically repressed Haiti is by opening its markets and increasing economic freedom. Unfortunately, Haiti’s reconstruction and long-term development plan, according to which the United States and international donors have pledged more than $15 billion, reads like a relic of central planning with virtually no mention of policies that promote economic freedom. Two sentences in the document mention the importance of clarifying land titles. One page mentions the role of the private sector, but it is in regards to its cooperation with the government’s “development centers” that will operate throughout the country to stimulate predetermined industries using government funds and guarantees and for “better redistribution of [the] population.”

We’ve been down this road before. If the Haitian government wishes to avoid disappointment and free itself from dependence on international aid, it needs to rethink its approach to development.

Earthquakes and Freedom: Chile vs. Haiti

Although some comparisons between Haiti’s 7.0 earthquake in January and Chile’s 8.8 quake this weekend have attributed the massive differences in devastation and lives lost (230,000 vs. some 700 respectively) to different enforcement of building codes and planning, the real reason for Chile’s superior ability to endure the disaster has everything to do with its vastly higher level of economic freedom, reliable rule of law, and the much higher level of prosperity that results. Here are three good articles that make those points:

Bret Stephens on “How Milton Friedman Saved Chile”

John Stossel on “A Tale of Two Quakes”

Anne Applebaum, “Chile and Haiti: A Look at Earthquakes and Politics”

And here’s a piece I wrote on Haiti explaining how economic freedom could have dramatically reduced death and destruction there.