Are 'Merit-Based' Immigration Systems the Answer?

​President Donald Trump's plan to reshape the U.S. immigration selection system would give greater preference to green card applicants' skills over their family ties. The Trump administration has cited the points-based systems used in Canada and Australia as models for its new plan.

Trump's "merit-based" immigration proposal would evaluate immigrants for green cards through points assigned for age, skills, job and salary offer, education, and English-language proficiency.

The plan calls for raising the percentage of employment-related immigrants—which includes workers' dependent family members—from 12 percent annually to 57 percent and cutting back family-sponsored immigration from about 66 percent per year to 30 percent.

"The plan is lacking detail but essentially proposes to move from a system where employers and family members select migrants to one in which the government selects people, with the intention of upskilling the whole system," said Julia Gelatt, a senior policy analyst at the Migration Policy Institute (MPI) in Washington, D.C.

“The devil will be in the details of any legislation put forward, but it is critical that any system acknowledge it is employers that know their skills and workforce needs best,” said Rebecca Peters, director of policy engagement at the Society for Human Resource Management.

What Are the Merits of Merit-Based Systems?

The U.S. currently relies on employers to identify and select workers based on existing vacancies, as long as the business has met legal criteria set by the government, added MPI President Emeritus Demetrios G. Papademetriou.  

"This approach is in sharp contrast to the merit-based systems of Canada, Australia, New Zealand and others, in which the government uses both employer demand and human capital considerations to select economic stream immigrants, awarding points for professional experience, a job offer, education, proficiency in the destination country language and other factors," he said.

There are many benefits to a points system for allocating green cards, including the elimination of lengthy backlogs. But what are the trade-offs of the Trump proposal? "We know that family is key to integration in the United States," Gelatt said, "and our family-based system is bringing in all kinds of people who do work and are filling jobs across the economy. Is it better for the government to select people? Or employers and family members?"

The ideal merit-based system is not simply points-based, said Meghan Benton, senior policy analyst and assistant director for research for the international program at MPI. "It is a dynamic, agile system that is actively operated by a hands-on government and carefully calibrates the profile of the future workforce. Many countries with points-based systems have been moving away from just selecting people on the basis of human capital attributes and giving more value to an employment offer," she said.

"Ultimately keeping employer sponsorship and/or heavily weighting a job offer under the point system will be extremely important, along with clearing the green card backlogs,” Peters said.

Jean-Christophe Dumont, head of the international migration division at the Organization for Economic Cooperation and Development (OECD), noted that Australia, Canada and New Zealand, countries often admired for their points systems, have been moving toward a hybrid model that attends to current labor-market needs while still using points to assess and select pools of prospective immigrants.

"The Expression of Interest model—introduced by New Zealand in 2004, adopted by Australia in 2012 and Canada in 2015—includes a points system but is not reduced to that perspective," he said.

Dumont said the countries were all facing "huge backlogs and long processing times" before the systems were implemented and that the programs made a significant difference in reducing wait times and expediting processing. The OECD has developed plans for adapting a similar system for the European Union.

Papademetriou said that concerns about poor outcomes for immigrants selected on the basis of points alone—because they had no specific job to fill or professional networks to be a part of—led policymakers to introduce more criteria into the selection process. They began awarding points for a job offer or for factors linked to better integration, such as education or work experience in that country.

"Some countries with U.S.-style, employer-led selection systems, such as Japan, South Korea and China, as well as several European Union member states, are now experimenting with using points tests to assess applicants entering through employer-sponsored routes," he said.

[SHRM members-only toolkit: Understanding and Obtaining U.S. Employment Visas]

Australia's Evolution

Australia's immigration system used to resemble the United States', with family reunification being the most common reason for awarding a visa. But over the last two decades, Australia has shifted to prioritizing skilled workers for permanent residence and workers at all skill levels for temporary visas, explained Anna Boucher, associate professor at the University of Sydney in Australia and a global migration expert.

"The system has been refined several times over the years to address concerns regarding the extent to which the profiles of those admitted matched the needs of the Australian labor market," she said.

Australia's points-based system has become increasingly employer-driven, allowing employers to recruit according to their needs, but there are also risks, Boucher said.

"An employer-led system may come to prioritize recruitment to fill short-term demand over long-term competitiveness, human capital needs and integration concerns," she said. "Employers may also become reliant on immigrant workers rather than raising wages for or upskilling the domestic workforce."

Canada Makes Progress

Canada implemented its Express Entry system—a points-based, two-stage design—in January 2015. The country's first-come, first-served points system from the 1960s couldn't keep up with the high volume of applications, said Daniel Hiebert, professor of geography at the University of British Columbia in Canada.

"The earlier system faced several limitations. It was inflexible, and by the 2000s, massive backlogs and yearslong processing times stymied employers' desires to bring in qualified workers whose skills matched the needs of the Canadian economy," he said.

Express Entry uses a digital platform to assess whether profiles submitted by prospective immigrants meet minimum eligibility requirements. Eligible profiles are then awarded points based on a variety of factors that evaluate candidates' human capital, the transferability of their skills and their ability to integrate successfully.

"The relative weight of these factors, along with minimum points thresholds, are set by a ranking system and can be adjusted at any time to ensure immigration targets are being met and those applying for residency have skills suited to the economy's demands," Hiebert said.

Papademetriou added that "Canada's points-based system appeals … both for its transparency, since it involves clear and objective selection criteria, and its flexibility, as policymakers can adjust the system's criteria and distribution of points in response to changing estimates of labor demand or evaluations of selected immigrants' integration outcomes."  

While Express Entry is "clearly a step forward," several limitations remain, Hiebert added. "The system struggles to assess applicants' real versus theoretical skills and to properly account for entrepreneurial talent and soft skills. The system also lacks creativity in considering the labor market potential of applicants' family members, and it has not been adapted for low-skilled workers."

Making Points Systems Work

Experts offered several key lessons from Australia and Canada for managing points-based immigration selection systems:

• Ensure systems are flexible and responsive. "Criteria for selecting immigrants should be managed and adjusted over time to ensure that they reflect actual skills gaps," Boucher said.
• Don't forget about the native citizen workforce. In addition to keeping an eye on sectors with high domestic unemployment, policymakers and employers should invest in upskilling and reskilling workers.
• Implement constant reviews. "One lesson learned is that these countries didn't get it right on day one," Dumont said. "Invest in evaluation and create a feedback loop."
• Use evidence on integration outcomes to inform admission criteria. "These countries run longitudinal surveys," Gelatt said. "They can see how people on particular selection paths did in the short term, what kinds of jobs they are working, what they are earning, how well they are integrating and how they are doing over the longer term. Governments can then use these data to understand how to revise the system and select people for both short- and long-term success."

U.S. Citizenship and Immigration Services hasn't digitized its records, and "we don't even know the most basic things," Gelatt said. "In order to adapt any lessons from around the world, we need to build the data and research infrastructure here in the U.S. to understand how the system is and isn't working and to evaluate any type of new system going forward."