New report: Auctioning immigration visas to highest bidder would boost economic growth

Auctioning immigration visas would boost economic growth argues a new report by the German Institute for the Study of Labor (IZA)

As many immigrant destination countries are facing considerable pressure to change their immigration policies the German Institute for the Study of Labor (IZA) haved today published a report on IZA World of Labor in favour of auctioning immigration visas. Last year the UK’s Migration Advisory Committee suggested auctioning visas to the super rich. For Madeline Zavodny, Professor of Economics at Agnes Scott College in Decatur, GA, US, this would only be the first step.

She argues that visa auctions would be more efficient than current ways of allocating visas, could boost the economic contribution of immigration to the destination country, and would increase government revenues. In particular work based visa auctions where employers would bid for the right to hire foreign workers would bring in immigrants with valuable skills that are in short supply among the domestic workforce. A resale market in unused or unwanted visas, visa portability across employers, and enforcement are all important components of a successful program to auction visas.

An employer-based auction system would likely result in a shift towards higher-paid immigrant workers and government coffers would swell due to higher tax revenue. The revenue raised by visa auctions could alleviate some concerns of opponents of immigration by using it to offset costs incurred by areas that receive large numbers of immigrants.

Policymakers who want to create a visa auction should consider starting with a pilot program aimed at investors, who are willing to pay substantial sums for visas. This might generate public support for broader auctions aimed at replacing employment-based visas for high- and low-skilled workers.

The full aritcle is now available online: http://wol.iza.org/articles/should-countries-auction-immigrant-visas​ 

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Notes for editors:

• IZA World of Labor (http://wol.iza.org) is a global, freely available online resource that provides policy makers, academics, journalists, and researchers, with clear, concise and evidence-based knowledge on labor economics issues worldwide.
• The site offers relevant and succinct information on topics including diversity, migration, minimum wage, youth unemployment, employment protection, development, education, gender balance, labor mobility and flexibility among others.
• Established in 1998, the Institute for the Study of Labor (www.iza.org) is an independent economic research institute focused on the analysis of global labour markets. Based in Bonn, it operates an international network of about 1,300 economists and researchers spanning more than 45 countries.