The Effect of Immigrant Admission Criteria on Immigrant Labour Market Characteristics

The skill levels of immigrants entering the United States has declined in recent decades, but most immigrants to the United States continue to be admitted on the basis of family contacts, without reference to labour market characteristics. This situation has given rise to a debate about the criteria on which immigrants are admitted or excluded. In this paper I examine how the relative skill levels of immigrants admitted under different criteria vary across countries, those criteria being the possession of highly-valued skills and family connections. I draw on the model of Borjas (1987) to predict how the relative skill levels of family-based and skill-based immigrant groups will differ across countries. Using data from the Immigration and Naturalization Service, I test the model and show that: (a) the relative skill levels of the two groups do indeed differ across countries; and (b) the pattern across countries is consistent with the Borjas predictions. The policy implication is that the effects of changing admission criteria will differ across countries, but in a predictable way.