No Free Tickets

A couple of weeks ago Gary Becker – a Nobel-prize winning economist –made a speech at the Institute of Economic Affairs in London, proposing a pretty radical solution to the rich world’s immigration woes.

His core proposition is, there is currently no price that matches supply and demand of work visas.  Vet out criminals and terrorists, and visas can be assigned to those willing to pay the most for them.  In theory, someone who has the most to gain from immigrating (say, a younger person, with more years to recoup the expense; a well-educated person whose income is most likely to significantly increase) would be willing to pay the most. 

The US currently receives about 1million legal immigrants a year.  Charging them $50,000 each for the right to immigrate would provide an additional $50 billion to the government coffers.  Not enough to save the banking industry, but about enough to bail-out AIG or GM.  And probably enough to make people take notice, especially in the current times.

Any radical position on immigration policy is going to attract a lot of criticism, and many people have been poking holes in the idea.  There are serious question marks and potential undesirable outcomes.  Does it really provide a better market mechanism than a points-based system (as already used in Australia, NZ, Canada)?  What skills alignment is there (ie wealthy retirees may like the idea of sitting out their years in Florida, but how does that benefit the US workforce)?  What about talented people who are not able to front up the cash?  Becker suggests a government-loan scheme, or even a form of indentured servitude to employers until loans are paid off. 

Regardless of the applicability of the scheme, I think it's healthy that there can be some intelligent public debate around such an emotional issue.  Here's to Mr Becker for putting his neck on the line.

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Image © Kazuhiko Yoshino