Debunking high-skilled immigration myths (or, why stapling green cards to diplomas is a bad idea)
Bad thinking leads to bad policy
This post features excerpts, lightly edited, from our new report, Exceptional by Design: How to Fix High-Skilled Immigration to Maximize American Interests. In Chapter 3 of the report, we look at nine myths that have led to flawed thinking about high-skilled immigration and, more importantly, bad policies. We feature three of those myths below. The other myths, in addition to our comprehensive plan for how to re-design the high-skilled immigration system, are in the full report.
How should the U.S. decide which high-skilled immigrants to let in? Where should they come from — and should that even matter? How many high-skilled immigrants should be allowed into the country each year? Should the U.S. try to attract only immigrants who do certain jobs?
Unfortunately, persistent myths about the nature of immigration have influenced the answers that pundits and policymakers commonly give to questions like these.
Some of these myths have contributed to the flawed policies that exist today. They are responsible for the baffling thicket of paperwork and bureaucracy that governs the current immigration system. One of the best examples of muddled thinking that has led to bad policy is the way employers are forced to offer “proof” that a high-skilled immigrant it wants to hire is not “taking a job” from a native-born worker.
Other myths have led to unsound proposals for future policies — and we should note that some advocates of high-skilled immigration are also vulnerable to flawed reasoning. Stapling a green card to every diploma of a foreign-born college graduate, for instance, sounds like a reasonable idea. It is surely well intentioned. But in practice this policy would prevent the United States from designing a system that brings in the very best candidates from around the world.
The idea that immigrants do jobs that “Americans can’t or won’t do” is as unsound as the myth that immigrants steal American jobs. Both myths are the result of narrow thinking, and both are wrong. The use of myths can be destructive even in pursuit of a worthy goal, giving ammunition to critics who can rightly point to the mistaken wisdom.
The way to avoid policy mistakes — and to design the optimal immigration policy for American workers — is by confronting these myths and replacing them with a more realistic understanding of how immigration works in the real world.
Myth: We can quickly identify labor market shortages and address them with tailored high-skilled immigration policy.
Reality: With rare exceptions, labor market shortages are ill-defined, impossible to measure, and a poor proxy for which types of immigration would be most beneficial to American workers and the economy.
A common view about immigration, often held by many proponents of more immigration, is that the benefits for native workers are maximized when immigrants do jobs that Americans cannot do or, for whatever reason, will not do. This assumption is the starting point for the myth that policy should seek to admit immigrants into specific occupations where the country has a “shortage” of workers.
The myth is problematic. So are the policies it leads to.
The most immediate problem is that no formal, widely agreed definition of a shortage exists. The process of identifying a labor shortage — one that might require immigration or another policy measure to offset — thus becomes either subjective or methodologically arbitrary.
To use just one example, a comprehensive immigration plan from the Economic Policy Institute (EPI) argues that if foreign workers are admitted “where there are certified shortages of domestic workers and they do not compete with or displace domestic workers, they will have positive effects.”1 Yet the report itself acknowledges that there is no accepted methodology for identifying shortages. It simply suggests the creation of a commission to solve the problem.
Any commission, however, would fail to adequately resolve this uncertainty. To understand why, consider one method used by the EPI report as an example of how to try to define a labor shortage. The report suggests using five criteria: average unemployment, employment growth, wage growth, projected employment growth, and projections of workers “needed to replace those who are leaving an occupation for various reasons.”
The clear inability of policymakers to engage in such fine-grained occupational micromanagement is well understood in any other context. Imagine, for example, if we asked a board of experts to determine how many degrees American universities should grant in each field using the above five criteria. But once again the obvious folly goes unnoticed when crafting immigration policy.
Even without a useful definition of shortages, there are some occasions when economists and policymakers and businesspeople will be in agreement that the economy does face a shortage of specific types of workers. But a proven mechanism already exists for addressing potential shortages of labor, commodities, iPhones, beach towels, and most other types of goods and services: markets.
If the national economy is in need of more construction workers, the wages of these workers will rise as demand outpaces supply. And if the barriers to becoming a construction worker are sufficiently low, then workers from other professions will shift into construction without any policy intervention.
The real wages of construction workers may or may not climb in the long run. Whether they do depends on largely unpredictable trends — technological improvements, legislative changes that affect the building industry, and the evolution of the economy more generally.
But should preventing the wages of construction workers from climbing too high be a priority for policymakers? No. Just as the government cannot possibly set the wages for jobs all across the economy, it lacks the capacity to set the wage growth of every job. And yet, occupational wage growth is one of the five criteria used to define a shortage in the Economic Policy Institute’s proposal. The implication is that actively stopping construction workers’ wages from rising — by pursuing the immigration of more construction workers and thus increasing the total supply of such workers in the country, ending the alleged “shortage” — should be an explicit goal of immigration policy.
This example is not, by the way, purely hypothetical. In 2015, homebuilding companies were complaining of widespread labor shortages.2 But over the next four years, the construction industry managed to add a million more workers. The process required time and higher pay — perhaps not the preferred solution of the homebuilders — but the idea that there simply did not exist people willing to do construction work proved false.
It is also important to remember that not every job opening is a policy failure. A normal labor market will have millions of job openings at any given time, and no policy could or should fill every one of them — even if employers are labeling them shortages. In a dynamic economy, opportunities are constantly arising in new or growing sectors that will prove attractive to workers, leaving some industries wishing they had more job applicants. The solution to labor shortage complaints is not to stop that process, but for firms to compete for workers by offering higher pay or by using other strategies — investing in better equipment and tools, automating certain tasks, improving management — to make their existing workers more productive.
Zooming out beyond construction workers, an approach that tethers immigration policy to alleged labor shortages is yet another way to compel the government to freeze the current distribution of wages across occupations — freezing, in other words, the current levels of wage inequality between occupations. This cannot be a legitimate priority of immigration policy, and it certainly fails to maximize the economic benefits of high-skilled immigration.
Despite the lack of any consensus method to identify a shortage, there are exceptions — rare cases for which the empirical evidence to justify the label is overwhelming.
One example is medical doctors, whose supply in the economy is tightly regulated, in practice a legally enforced shortage. And in agriculture, a large body of evidence shows that the native-born supply of workers can effectively be zero.3
And in industries that have strategic importance to the U.S. for national security or other reasons, a public policy rationale can exist for increasing the supply of specific kinds of workers critical to their growth. The CHIPS and Science Act, for example, codifies the U.S. interest in developing a growing share of the global semiconductor industry. It is reasonable in this case to refer to a shortage of workers (in specific occupations) relative to the levels that would be needed to grow the industry.
But these few cases are not representative of the overall labor market. There remains no valid, empirical test to determine whether one occupation is seeing a more acute shortage than another. Finally, an emphasis on filling shortages furthermore distracts from the astounding economic spillovers that high-skilled immigration can yield, and has yielded, for the American economy — innovation, entrepreneurship, a huge fiscal boost, the expansion of the economy’s frontiers. The logic and mechanisms of the immigration system should be designed to maximize these benefits, in alignment with American economic interests.
Myth: We should staple green cards to international students’ college diplomas.
Reality: Experience suggests linking degrees with long-term visas will incentivize the growth of “degree mills.”
Leaders on both sides of the aisle have long suggested issuing green cards to international students graduating from an American university. Such proposals are well-intentioned; the U.S. retains only a fraction of the international students we train, mostly due to insufficient visas or green cards. This “brain drain” hurts the U.S. economy and American businesses.
But stapling green cards to diplomas will incentivize the creation or expansion of so-called “degree mills.” When the U.K. began allowing graduates to remain in the country for two years after finishing their degrees, international student enrollment jumped. These increases were concentrated in lower-ranked schools, rather than premier research universities.4 In Australia, a review found that “recent growth in international education has been partly driven by nongenuine students and unscrupulous education providers” — including “so-called ‘ghost schools,’ where nongenuine students allegedly maintain enrollment without attending classes.” As a result, the review found that over half of graduate visa holders “are working significantly below their skill level.”5
Given both the prospect of permanent residency (as opposed to a mere two-year guarantee) and significantly higher wages in the U.S., it is likely that stapling green cards to diplomas would create an even stronger “degree mill” incentive.
Setting aside the incentive problem, the prospect of linking graduation with permanent residency raises a deeper, philosophical question: Who should be the ultimate arbiter of immigration decisions? “Stapling green cards to diplomas” would effectively outsource a key pillar of our immigration system to university admissions offices. Given the fierce political fights on college campuses, many of them over deeply polarizing issues, this is not likely to sit well with American voters.
Myth: Expanding high-skilled immigration is politically risky.
Reality: There is strong bipartisan consensus for increasing high-skilled immigration.
A recent survey of likely voters from the Economic Innovation Group and Echelon Insights found overwhelming support for expanding high-skilled immigration — not only from the median voter, but from large majorities in both parties.
According to the survey, voters support high-skilled immigration in such overwhelming numbers because they recognize its positive effects on entrepreneurship, innovation, reinvigorating struggling areas, and other economic trends.
In the same survey, Americans expressed deeply negative sentiments about the American economy, concerns about the border crisis, and the perception that the overall immigration system isn’t working. But rather than causing Americans to turn inwards and reject foreign-born talent, none of these worries dented their support for increasing high-skilled immigration. These findings have been reinforced by another, separate survey from Pew.6
Issues like the border crisis and illegal immigration clearly matter to voters — but policy reform that expands high-skilled immigration need not be delayed until after they are resolved. There is sweeping bipartisan support for it right now.
Ray Marshall, Immigration for Shared Prosperity: A Framework for Comprehensive Reform (Washington, DC: Economic Policy Institute, 2009).
See for example, Kris Hudson and Jeffrey Sparshott, “Labor Shortage Pinches Home Builders,” The Wall Street Journal, October 12, 2015.
See Michael A. Clemens, “The effect of foreign labor on native employment: A job-specific approach and application to North Carolina farms,” Center for Global Development, Working Paper 326 (May 2013) & Michael A. Clemens and Ethan G. Lewis, “The effect of low-skill immigration restrictions on US firms and workers: Evidence from a randomized lottery,” National Bureau of Economic Research, No. w30589 (October 2022).
“Rapid Review of the Graduate Route,” Migration Advisory Committee of the UK, 2024.
“Migration Strategy: Getting Migration Working for the Nation,” Commonwealth of Australia, 2023.
“Trump and Harris supporters sharply divided on mass deportations and undocumented immigrants but more aligned on border security, high-skilled immigration,” Pew Research Center, September 26, 2024.