A Property Rights Approach to Temporary Work Visas

Rules for temporary labor visas in the United States are criticized on three grounds: for failing to allocate visas efficiently, for failing to adequately protect domestic workers, and for exposing migrant workers to exploitation. We argue that it is possible to address all three problems by reconfiguring the property rights associated with the visas and carefully designing the mechanism for allocating those rights. Our core insight is to unbundle the two rights that today are typically combined: the firm's right to employ a foreign worker and the worker's right to reside and work in the country during that time. A three-pronged approach--auctioning abstract precontract visas to firms, allowing their trade on a secondary market, and transferring the visa's ownership to the worker upon signature of the employment contract--has the potential to improve the efficiency of visa allocation, to better shield domestic workers, and to protect foreign workers from exploitation.