A while back I wrote out my thoughts on immigration in a more thorough manner than I have before or since. However, this was at Scott Sumner’s blog and I often have trouble finding that old post (though I have linked to it before). I decided I should put it here so I can find it more easily.

My first comment:
Guest-workers are an example of importing labor but not receiving immigrants. I would endorse a large guest-worker program like Dubai’s rather than simply letting the workers immigrate. I say this because I am not a liberal or perhaps even a libertarian.

Sumner responded:
I have an open mind on guest workers. I see pros and cons to those programs. I suppose I tend to favor immigration over guest workers, although if I had my way I’d change our immigration program to something closer to what Australia and Canada have. If I am not mistaken our immigrants are skewed toward the low-skilled. It might be better to have a more balanced approach. I’m not an expert here so someone please tell me if I am wrong in my comparison of the U.S. to those other two countries.

I post a long comment in response:
I agree that our immigration regime skews low-skilled, due to both the heavy role family reunification plays and the tacit acceptance of large amounts of illegal immigration from certain regions. I was surprised when I found that African immigrants hold white-collar desk-jobs at a rate higher than the native-born white population (though maybe I shouldn’t have been). To me that screams “marginal returns have a ways to diminish before they turn negative!”. My ideal immigration system would be two-tiered: high-skilled workers would be encouraged to come here permanently and could bring family (though we may want to put them through an initial period of lots of soul-draining profitable work & anomie). I think smarter voters will tend to do a better job, and so they can be enfranchised. Like a company considering hiring a long-term employee or a condo association considering a new occupant, our perspective will be: “Is this the best deal for us [the current "shareholders" of the company] we can find”? Because there are so many people willing to immigrate, we can levy higher taxes on them and provide fewer services and still expect many to accept.

It would be extremely difficult to try and stop immigration from our southern border, so instead we will institute a guest-worker program to control it. They would truly be guests and would be encouraged to send remittances home. They would have a pre-established relationship with an employer who is in effect “vouching” for them. The vouching company will be held responsible for any complaints the citizens may lodge against the immigrants (in addition performing a bail-bondsman like duty of keeping track of their whereabouts). Bryan Caplan acknowledged[*] the resistance many Americans have to immigration and proposed that we simply tax the immigrants (or their employers, it is equivalent) and bribe the natives into putting up with them. There are large enough gains from trade for this to be quite feasible. With their status being perfectly legal, immigrants will not be punished for returning home by being unable to go back again to the U.S. While there are some costs involved in employee turnover, we don’t want a lucky few immigrants to hog all the available slots indefinitely and so visas will have a limited time and will be awarded semi-randomly to the pool of acceptable candidates. This way those who do not win initially will be more willing to accept it on the possibility that there’s always next time in the not-too-distant future, and returning immigrants will accept going back to their lower wages at home on the expectation that they may get to go north again.

I could probably put a lot more thought on how to maximize our gains, but it seems obvious right now that we have far from an efficient system.

*I didn’t link to this at Sumner’s, but should have. It was a lot easier to find this while searching before that, and I suppose it’s relevant enough to link as well.

UPDATE: This exchange between Bryan Caplan and Richard Hoste is quite relevant.

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