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Skilled Migration Trends and Policy Evolution: A Multilateral Overview
The first panel session of the workshop focused on immigration trends and provided a brief summary of changes in immigration policies in Canada and Australia. Jean-Christophe Dumont, head of the International Migration Division in the Directorate for Employment, Labor, and Social Affairs at the Organisation for Economic Co-operation and Development (OECD), gave a broad overview of recent trends in high-skilled immigration to the United States and other OECD countries. Despite challenges with its immigration policy, the United States still attracts the most talented migrants, although there are signs that other countries might be becoming more attractive for high-skilled immigrants. High-skilled immigration is growing faster in other parts of the OECD compared to the United States and United States’ share of international students has been shrinking. Moreover, high-skilled immigrants represent a small fraction of the U.S. workforce, in contrast to Canada, Australia, and the United Kingdom. Mark Giralt, Minister-Counsellor for Immigration at the Embassy of Canada, and Miranda Lauman, Acting Regional Director at the Embassy of Australia, provided their perspectives on Canadian and Australian immigration policy reforms, respectively. Unlike the United States, Canada and Australia have made their immigration systems more flexible and continually adjust their immigration policies. That flexibility may be the result of the recognition that regional issues matter: Canada’s immigration system looks at prevailing wages and regional unemployment and Australia has a no-disadvantage test to ensure that its policies do not harm the native population. In addition, both Canada and Australia have collected more extensive data on the outcomes of immigration than the United States. This includes longitudinal studies of immigrants. There is evidence that the increased flexibility in immigration policies has paid off. In Australia, the wait time for a visa has decreased drastically and the unemployment rate of immigrants who were not sponsored by an employer is lower than the native-born unemployment rate. An open discussion, moderated by session chair and workshop planning committee chair Jennifer Hunt, followed the three presentations.
RECENT TRENDS AND FUTURE CHALLENGES IN THE GLOBAL COMPETITION FOR SKILLS
According to Jean-Christophe Dumont, while the number of high-skilled workers migrating to the United States is growing, it is growing less rapidly than in other parts of the OECD. There has been a huge increase in the number of highly skilled migrants in OECD countries overall. The OECD classifies high-skilled individuals as those who have completed tertiary education that culminates in the receipt of certificates, diplomas, or academic degrees.1 According to a 2010-2011 census, 11.3 million migrants, or 28 percent of all migrants aged 15-64 in the European Union (EU), had completed tertiary education—a 92 percent increase over a 10-year span from 2000 to 2010. This number is somewhat misleading given that migrants in the EU include those moving between countries within the EU. The number of highly skilled immigrants in Australia doubled over the same ten-year period and increased by 72 percent in Canada. In contrast, 11.1 million migrants, or 31 percent of all migrants in the United States, have completed tertiary education, which is only a 47 percent increase over the same period. In Europe, about half of all high-skilled migrants come from other European countries, and another 20 percent come from Asia. In the U.S., approximately 45 percent of the high-skilled migrants come from Asia and 20 percent come from Europe. The share of highly skilled migrants coming to the United States from Europe is falling while the share from Latin America is increasing (Figure 3-1). Asia is also the main region of origin for highly skilled migrants in Australia and Canada.
While the overall educational level of individuals entering the labor market in OECD countries increased rapidly between 2000 and 2010, the share of migrants with tertiary degrees is over-represented in the entire labor force and has risen faster than the number of migrants overall. Dumont noted that migrants have accounted for 14 percent of the growth of tertiary degree holders between 2000 and 2010 in European OECD countries, 21 percent of the growth in the United States, and 31 percent of the growth in Canada.
There is no doubt, stated Dumont, that the United States gets the most talented and skilled migrants, with over 7,000 EB-1-1 or EB-1-2 visas granted for outstanding researchers or extraordinary2 individuals. In addition, 57 per-
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1Chaloff, J., and G. Lemaître. 2009. Managing Highly-Skilled Labour Migration: A Comparative Analysis of Migration Policies and Challenges in OECD Countries. OECD Social, Employment, and Migration Working Paper No. 79. Paris, France: Organisation for Economic Co-operation and Development. Available at http://www.oecd.org/els/mig/46656535.pdf [Accessed October 21, 2015].
2According to the Department of Homeland Security, a person with “extraordinary ability” is an individual that can demonstrate extraordinary ability in the sciences, arts,
cent of the world’s migrant inventors live in the United States. Some 650,000 migrants in the United States have PhDs, accounting for a third of all migrant PhD holders in the entire OECD. Forty percent of all OECD migrants with the highest levels of literacy and numeracy reside in the United States.
In relative terms, high-skilled migrants represent a small fraction of the U.S. workforce, compared to the workforces in Canada, Australia, and the United Kingdom, for example. U.S. migrants who came under work visas account for a small fraction of the U.S. population. The fraction of migrant workers is much higher in Canada, Australia and New Zealand (Figure 3-2). Moreover, the percentage of migrants to the United States with tertiary education has fallen over the past decade and now represents 41 percent of all tertiary educated immigrants in the OECD, compared to 46 percent in 2000-2001. In 2010-2011, more than half of recent immigrants to Australia, Canada, and the United Kingdom had tertiary degrees, compared to less than 35 percent of recent immigrants to the United States. Over 20 percent of recent tertiary-educated immigrants to OECD countries come from China, India, or the Philippines.
FIGURE 3-1 Share of highly educated migrants in the OECD aged 15-64 by region of birth, 2000-2001 compared to 2010-2011. Country of origin for high-skilled migrants in Europe (left) and the U.S. (right). SOURCE: Database on Immigrants in OECD and non-OECD Countries (DIOC) 2010/2011.
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education, business, or athletics through sustained national or international acclaim. The achievements of these individuals must be recognized through extensive documentation. No offer of employment is required but the applicant must meet three of ten pre-defined criteria or provide evidence of a one-time achievement such as a Nobel Prize, Pulitzer, Oscar, or Olympic Medal. Definition available at http://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-first-preference-eb-1 [Accessed on November 23, 2015].
FIGURE 3-2 Legal permanent migration flows by category of entry as a percentage of the total population in selected OECD countries, 2012. SOURCE: OECD International Migration Outlook 2014.
In addition, there are concerns that the U.S. H-1B visa program, which was designed for high-skilled applicants, is not very selective. Currently, the H-1B program accounts for about 25-30 percent of all temporary high-skilled migrants in the OECD, but only 25-50 percent of H-1B visa recipients would qualify for the analogous Blue Card in European OECD countries. In addition, the entry wage for H-1B visa holders without previous professional experience is low, which may indicate that this program is being used to recruit lower-skilled workers.
Across the OECD, international students account for an increasing number of high-skilled migrants. The number of foreign students worldwide and in OECD countries more than doubled between 2000 and 2012, but the United States is getting a smaller share of international students. While the United States is still the predominant destination for international students in absolute terms—some 710,000 students in 2011—its share has been steadily shrinking over the past 12 years with 25 percent of all foreign students going to the U.S. International students account for 3.4 percent of U.S. university students, about the same share as in Japan. The OECD average is nearly twice as high. By way of comparison, international students make up 20 percent of the university student body in Australia, 17 percent in the United Kingdom, and 7 percent in Canada. On the other hand, despite more stringent requirements for transitioning from student visas to work permits or permanent resident status, the United States has higher retention rates for PhD students than other OECD countries.
According to Dumont, there are five main channels to attract high-skilled migrant workers. Some countries rely on a “supply-driven system” that selects migrants who then look for a job that matches their specific qualifications. The United States and most European countries use a “demand-driven system” that requires an applicant to have a job offer before securing a work visa. Australia and New Zealand—and soon Canada—have adopted a points-based system or expression of interest model. The two other channels for migration are student visas and intercompany transfers.
However, countries are starting to use hybrid immigration management models that merge these channels. Some countries are using systems that reward applicants for having a job offer in a supply-driven system or are placing increasingly complex conditions on demand-driven systems. One illustration of this trend is the increasing number of two-step processes that first require an applicant to have a temporary visa before applying for a permanent visa. In Australia, for example, 50 percent of permanent migrants were previously on temporary visas. In New Zealand, 70 percent of permanent migrants were initially issued temporary visas. This hybrid approach comes with stronger enforcement mechanisms that include risk monitoring, evaluation, and dynamic management.
In closing, Dumont explored the following three policy questions: (1) why aren’t highly skilled migrants doing well in the labor market; (2) should immigration policies be focused on attracting the most talented individuals; and (3)
should immigration policies be focused on particular degrees or on skills in high demand.
Highly skilled migrants do not always fare well in the labor market. The gap in employment rates between native-born and foreign-born individuals increases in all countries as the level of education rises (Figure 3-3). According to Dumont, this may be due to migrants with tertiary degrees having difficulty getting jobs in line with their level of education.
Not all companies need PhD-educated employees. An OECD survey in Germany, for example, found that while large companies are seeking high-skilled employees, medium- and small-sized companies have a greater need for individuals with technical skills but not necessarily PhDs (Figure 3-4). Current immigration systems are not designed to respond to that kind of demand, and Dumont cautioned that countries need to be careful when revising their immigration policies to reflect the demand for individuals with medium skill levels.
Finally, while the level of education in origin countries is increasing, the quality of that education and the skill sets that students acquire during their education may differ from country to country, so immigration policies should not necessarily focus on attracting migrants with particular degrees. The global workforce has become increasingly mobile, particularly for the highly skilled, so countries may do better by shifting the focus from attracting migrants to retaining them. Some countries, such as Germany and Portugal, which have problems retaining native-born workers, may do better by focusing on retaining high-skilled natives. Finally, immigration policy may be tied to what domestic companies are doing with regards to outsourcing, especially with regard to the services sector.
TRANSFORMING THE CANADIAN IMMIGRATION SYSTEM
Mark Giralt of the Embassy of Canada, made a presentation on the transformation of Canada’s immigration system. He first noted that there are many parallels between Canada’s approach to high-skilled immigration and Australia’s. Immigrants are a bigger share of Canada’s overall population than in most OECD countries. About 60 percent of its immigrants fall into the economic category, which includes the primary applicant as well as his/her dependents. Another 10 percent are admitted for humanitarian reasons, and the remaining 30 percent come from family-based reunification categories. In the past, Canada’s foreign skilled worker category relied on a points-based process valuing education, language ability, and work experience, with some points for potential economic contributions from family members. However, qualified individuals entered a first-in, first-out queue that puts some applicants in limbo for 5 or more years as they waited in the queue, by which time the opportunities that were present when they applied for a visa no longer existed.
FIGURE 3-4 Percentages of German employers who reported unfilled vacancies at the respective skill level, out of all employers with unfilled vacancies, by company size and skill level, 2011. The skills levels in the survey have been defined according to the qualifications required for the job. “Low-skilled” refers to jobs requiring at most lower secondary education; “medium-skilled” to jobs requiring upper secondary and post-secondary non-tertiary education; “high-skilled” to jobs requiring tertiary education. SOURCE: OECD, Recruiting Immigrant Workers: Germany, 2013.
In response to this problem, Canada introduced a number of policy changes, such as capping applications for certain occupations and building in preferences for others, and moved to an “expression of interest” immigration system. The important characteristic of such a system is that individuals meeting certain requirements are invited to enter into a pool that gives them greater opportunities to find employment and obtain the appropriate visa. Applicants will remain in that pool for one year after which they will have to reapply in order to reenter the pool. While that approach may seem harsh, it creates a system that is better prepared to respond to Canada’s economic needs with a just-in-time level of service.
Giralt then described other innovations that Canada has introduced. One is a skilled trades program that recognized that the country’s points-based system was unable to develop the right formula to attract the types of skilled trades needed in specific sectors in the Canadian economy, such as Alberta’s oil industry. This program had an initial goal of attracting 3,000 potential immigrants out of Canada’s total economic migrant allotment of 80,000 individuals; that number has since been raised to 5000 individuals.
Canada has also introduced a start-up visa program that aims to match venture capital and individuals with ideas that can be transformed into new engines of economic growth. So far, Canada has approved the first two candidates from this program. In addition, the skilled-worker program now includes provisions for 500 foreign PhD students to bypass existing caps for specific occupations. “What we are trying to do is move from a system where anybody that meets the basic requirements ends up in a queue to systems where we are
really trying to engineer a little bit more responsiveness so that we can respond to specific labor market needs,” said Giralt.
Another new category for migrants, the Canadian experience class, recognizes Canadian work experience and education. This category has been growing substantially and enables individuals who have been in Canada with temporary worker status for a certain amount of time, or who have graduated with a post-secondary degree from a Canadian educational institution, to apply for permanent residence status. At present, the criteria for eligibility have been limited to managerial, highly technical, and technologist positions, but Canada is considering broadening the eligibility for this immigration class.
Canada recently suspended its immigrant investor program, which had been in place since the 1970s. “What we were finding was that the investments that were coming in were mostly based on bank loans being completed in Canada and where the immigrant was putting up very little of their own money,” Giralt explained. The government felt it necessary to take legislative action given that the program was not meeting its needs; this action eliminated a significant number of applicants.
Canada also recently reformed its temporary foreign worker program to make it more responsive to market needs. The program was increasingly being used to attract workers who could fill lower-skilled non-agricultural positions. To reform this program, Canada tied access to low skilled foreign workers to regional unemployment rates and changed the way it counted low-skilled workers from one based on job classifications to a system that looks at wages and classifies jobs based on whether they pay below or above the regional median wage.
In conclusion, Giralt said that the changes to Canada’s immigration system are meant to respond to the challenge and frustration of running an inventory-based system that has not been agile or responsive enough to meet the nation’s need for high-skilled immigrants. Canada’s hope is that this new system will incentivize employers to look first to its recently arrived permanent residents or persons on the path toward permanent resident status for skilled workers rather than turning to temporary foreign workers. Finally, Giralt said that significant changes need to be implemented to create a system that deals with applicants in a more up-to-date and responsive manner.
AUSTRALIA’S APPROACH TO HIGH-SKILLED IMMIGRATION
Miranda Lauman presented Australia’s approach to high-skilled immigration. She agreed with Giralt’s earlier comment about the similarities between the Australian and Canadian immigration systems, noting that Australia adopted the Canadian points-based system many years ago. In Australia’s case, however, the points-based system takes into account factors beyond skill-set and
work experience and includes “settlement attributes” (e.g., age, English proficiency levels) that have improved the success of its immigration policies for skilled migrants.
Over the past 15 years, there has been a distinct shift in Australia’s approach to immigration policy, from a system that was supply driven to one that is demand driven and meets the needs of employers. Under the old system, Australia had a surplus of people who wanted visas. As a result, the Australian government implemented a capped migration system which was based largely on national economic concerns, albeit with some industry input. Like Canada, Australia’s old first-come first-served policy ended up with long queues of up to 5 years for high-skilled individuals while less skilled applicants were able to quickly obtain visas.
One of the most significant recent changes to immigration policy in Australia was the creation of the “expression of interest” program or “Skilled Select Program.” This program was formally introduced on July 1, 2012. Because of the legislative landscape in Australia, it took several years to implement this program which focuses heavily on employer-sponsored migration. According to Lauman, “We are really getting to the point now where we can start to evaluate the value of those changes and whether they are delivering for migrants and for the Australian economy.” Since the implementation of the Skilled Select Program, there has been a significant reduction in the long queues associated with the first-come first-served approach. This system is better managed and targeted to meet industry skill needs than others.
Australia faces many of the same challenges in attracting skilled migrants as other OECD countries. On the one hand, the country needs to employ local people and to train them to do skilled jobs. On the other hand, the country wants people who already have the skills to come in to fill gaps. She added that Australia, like Canada and the United States, has a federal immigration program, which means that local issues and local shortages can be difficult to address; however, as described below, Australia has made significant changes to its policies to respond to regional or local needs. Another tension exists between selecting those individuals who fill today’s skill gaps versus choosing individuals who meet longer term needs or solve the demographic challenge of an aging native population. Furthermore, Australia must balance between skilled migrants and family migrants, although a policy that restricts family migration can make a nation less attractive to high-skilled individuals. Finally, there may be public perceptions of economic or national security risks associated with migration.
The first change Australia made was to alter its processing priorities to meet industry demands. Instead of a system in which those who met the bare minimum requirements would eventually get a visa if they waited long enough to rise to the top of the queue, Australia moved to one in which applicants demon-
strated their skill sets and government issued invitations based on the nation’s projected medium- to long-term skill needs. The country also allowed state governments to review the applicant pools in an attempt to bridge the gap between national objectives and local needs. For example, Lauman said that a state that has a particular need for mining can focus on individuals with mining-related skill sets without the need for the national government to change its priorities. Meanwhile, the federal government sets quotas for specific occupations to make sure that no one occupation dominates the selection process. This new system has reduced processing time for applicants from about five years to a matter of months.
In Australia, 37 percent of skilled migrants come from employer-sponsored requests. These requests are split between region-specific programs that require individuals with certain skill sets and more general employer programs. In addition, a large share (68 percent) of individuals who receive employer-sponsored visas previously held a temporary visa in Australia, with some employer-sponsored visa recipients having lived in Australia for more than three years. Many employers are using the temporary migration option to determine whether an individual is suitable for a particular position and whether the migrant and family members adjust to living in Australia.
Australia’s “Temporary Skilled Migration Program” has a number of skill requirements as well as a language requirement, but the key element is that an applicant needs to first have a job offer. Lauman noted that one challenge associated with this program is achieving the right balance between the desire to quickly process applications in order to fill specific jobs, and ensuring that migrants are not put into vulnerable positions in which they are beholden to employers. An independent panel recently issued a number of recommendations for reforming this system, which are necessary as the labor market changes and as people’s knowledge about the system changes.3 Many of the current recommendations would increase the transparency of the program in a way that simplifies sponsorship while also ensuring that migrants are not captive to a single employer.
The country’s student visa program is another important avenue into permanent migration. Australia’s student visa program underwent changes in the late 1990s to make it easier for foreign students educated in Australia to become permanent residents. At the time, those changes largely entailed alter-
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3In 2014, Australia’s Assistant Minister for Immigration and Border Protection announced an independent review of the temporary work (skilled) visa (Subclass 457) pro-gramme. The final report, Robust New Foundations – A Streamlined, Transparent, and Responsive System is available at https://www.border.gov.au/ReportsandPublications/Documents/reviews-and-inquiries/streamlined-responsive-457-programme.pdf [Accessed on November 23, 2015].
ing the points system to award additional points to individuals who had graduated from Australian institutions. Over time, however, this approach produced unintended consequences. Of particular concern, said Lauman, was the fact that foreign students were choosing courses and majors based on occupations that were given priority processing. This resulted in an increase in students in those particular fields, but it did not translate into an increase in workers in those fields. Today, the student visa program allows students to work in Australia for 4 years after graduation regardless of the field of study. This work experience then plays an important role in the permanent resident application.
Finally, Australia has reinstituted its longitudinal survey, the Continuous Study of Migration. This study indicated that 80 percent of skilled migrants surveyed came from non-English language speaking countries, and they are outperforming Australian natives in the nation’s labor market. With the first 6 months of immigration, skilled migrants who were not sponsored by an employer had an unemployment rate of 5.7 percent, compared to 6.2 percent for the population as a whole.
Ron Hira, a workshop attendee from Howard University, started the discussion by asking about the policy levers that Australia and Canada have implemented to ensure that their temporary work visa programs are being used appropriately in terms of selectivity and not adversely impacting the domestic labor force. In particular, he asked the panelists to comment on the use of wage floors, the recruitment of domestic workers prior to hiring a foreign workers, and non-displacement of a domestic worker with a temporary worker. According to Giralt, the changes that Canada made during the summer of 2014 to its temporary foreign worker program responded to all three of these concerns. Instead of using skill level as the primary classification, Canada now looks at prevailing wage and regional unemployment levels. For example, for a low-wage occupation in a region with an unemployment rate of 6 percent or greater, there are strict caps in terms of employers’ ability to have foreign workers fill more than a specific percentage of a their workforce. He noted that Canada’s experience prior to these changes was that foreign workers were being used to prevent wages from rising naturally. He cited data from the oil fields in Alberta showing that while there had been a 3 percent increase in overall wages, restaurant workers had only seen a 1 percent wage increase. Another new feature of the approval process is that employers are required to complete an 18-point evaluation at their expense to ensure that they have gone through the effort of recruiting someone from the local market.
Lauman said that Australia has a “no-disadvantage” test in place for temporary skilled workers that has been extended to individuals coming to Austral-
ia even for very short periods of time. In addition, there is a requirement now for employers to implement training programs for Australians in areas where there is a projected long-term gap that is currently being filled by foreign workers. She also noted that a wage calculation process is in place for temporary skilled workers who are seeking what is known as a 457 visa. The 457 visa requires companies to pay foreign workers at least the median wage for that occupation (for jobs paying up to $180,000 per year). Dumont added that the most effective way to ensure that there are no negative impacts on the domestic labor market is to ensure that recruiting foreign workers is always more costly than recruiting a domestic worker. As an example, he cited the case of Sweden, which has a demand-driven system in which the only thing that is checked is that the job offer comes with the prevailing wage and work conditions. The key here is that Swedish trade unions are making sure that employers are complying with this requirement, and as a result, employers will only hire foreign workers when there are no local applicants available because of the higher costs of recruiting foreign workers.
Ellen Dulberger asked the panelists to comment on the importance of databases in monitoring the performance of high-skilled immigrants. Giralt and Lauman both replied that their respective countries do not have formal procedures in place for monitoring and collecting data but rather collect data as part of field research projects. Lauman added that over the past five years, Australia has created formal consultative councils around skilled migration to provide feedback to the government on how policy changes are affecting the economic performance of high-skilled migrants.
Bill Kamela, from Microsoft, asked Giralt and Lauman how their countries garnered buy-in from employers vis-à-vis their points-based systems, given that such systems are picking winners and losers by determining which occupations are more or less valuable. He also asked how these systems remain up-to-date in terms of how points are assigned for given occupations. Lauman said that Australia is trying to not be too prescriptive when it comes to defining occupations, which provides some built-in flexibility. She also said that the process of determining which occupations should be on the priority list has been completely revamped to account for the number of students, both domestic and international, that are moving through different fields of study, and on the short-term needs of various industries in Australia as determined through consultation with industry. In closing, she noted that Australian businesses have embraced the new temporary work program.
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