Managing Migration

A modest proposal for a new approach to immigration

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Migration is among the most politically contentious issues facing the world today. A growing number of people around the globe are questioning the logic of allowing immigrants into their nations, asking whether their nations’ doors should be open or closed, or if a balance can be struck between the extremes. As with many of the issues explored at Risk & Progress, there are no easy answers; only imperfect solutions. Still, given this issue’s salience today, it is worth examining the merits of immigration, which approaches work and which do not, and what a pro-progress migration policy might look like.

Immigration Myths

First, it’s important to dispel some common myths surrounding this topic. First among these myths is the zero-sum notion that new arrivals take jobs from native-born people. The belief that immigration results in fewer jobs and lower wages is known as the “Lump of Labor Fallacy,” which presupposes that there is a fixed amount of labor needed in a country. Therefore, when immigrants arrive, they “take” jobs that otherwise would go to the “native” population. On the contrary, the non-zero-sum nature of immigration’s impact on employment was demonstrated in the late 19th century by economist David Frederick Schloss, who noted that the influx of immigrants increases both the supply of and demand for labor. After all, immigrants need places to live, they buy cars, they attend university, and go on vacation, etc. They consume just as the “native” population does.

A famous study, for example, examined the effect of the “Mariel Boatlift,” the mass emigration of Cubans to Miami, Florida, in 1980. This event abruptly increased Miami’s labor supply by 7 percent, yet there was no discernible impact on wages or unemployment. The labor market quickly adapted to the influx of migrants, as the surge in labor supply was accompanied by a surge in labor demand. It’s worth noting that this event occurred amid a severe economic recession in the United States and still didn’t move the needle on unemployment or wages. Similarly, after the collapse of the USSR, mass migration of Jews into Israel swelled the population by 12 percent with no negative impact on local employment.

In fact, the opposite seems true: immigration appears to be positive-sum concerning employment. One study found, for example, that with every one immigrant that arrived in the United States between 1980 and 2000, 1.2 new jobs were created. This is, in part, also because labor isn’t always substitutable. Compared with natives, immigrants have different employment preferences and expectations, including work locations, hours, and the types of occupations they seek out. For this reason, immigration restrictions usually don’t help the “native” population and may, in fact, cause undue harm to them. As Nominal News wrote when discussing H1B visa restrictions in the US:

The importance of these preferences can be seen in the US doctor market – a significant number of doctors in rural areas are immigrants, which can in large part be attributed to preferences of local doctors who may prefer to live in more urban areas. Banning immigrant doctors will not result in rural areas getting ‘local’ doctors, but rather not having doctors at all.

Historically, attempts to aid the “native” population by restricting immigration do tend to cause more harm. A study examining the effects of the 1882 Chinese Exclusion Act, for example, found that it depressed the economy of Western US states for generations. The act was part of a series of escalating restrictions that were continually amended and extended. It began as a thinly-veiled effort to prevent Chinese women from immigrating to the US and Chinese immigrants from owning land. It eventually morphed into a complete ban on all ethnic Chinese from entering the US, including those who were already legally present, while still barring them from naturalizing as citizens. Imprisoned in their own country, many Chinese immigrants packed up and left. At the time, the Chinese Exclusion Act was broadly popular, justified as a way of protecting the jobs of “real” Americans. Yet, the white American laborers, the intended beneficiaries of the Act, were left worse off: the act(s) reduced the growth of the white labor supply in Western states by 28 percent and lowered their occupational income scores.

Anti-immigrant fever, of course, was left unsatisfied. Soon, immigration restrictions escalated beyond ethnic Chinese. In the early 20th century, law after law, executive order after order, were promulgated, gradually making it harder to immigrate to the US and eventually culminating in the Immigration Act of 1924, which created strict immigration quotas based on national origin. The Act was explicitly intended to restrict the immigration of “less favorable” immigrants, which, at that time, meant migrants from the “backward” nations of southern and eastern Europe. One of its architects, Sen. David Reed, wrote in The New York Times that the Act’s passage would allow the United States to become “a more homogeneous nation” and a “vastly better place to live in.” Retrospective analysis estimates that the Act, however, led to a 68% decline in patent applications in industries where affected immigrants specialized and reduced US inventive output by an estimated 30 percent overall.

Speaking of innovation, one study, tracking 130 years of patent activity by US firms and real income growth of native-born workers, found that migration into the US had a positive impact on both economic growth and innovation. In addition, they estimate that liberalization of US immigration law after 1965, which finally undid the draconian 1924 quotas, increased total US innovative output by 8 percent and wages by 5 percent. While comprising just 11 percent of the US population, immigrants account for 23 percent of patent output and 32 percent of overall US innovative output after 1990. Non-Americans account for an astonishing 54% of master’s degrees and 44% of doctorate degrees issued by American universities in science, technology, engineering, or math.

Immigrants are also disproportionately entrepreneurial. Immigrants start 20 percent of all American businesses, and as of 2025, immigrants or their children founded 46 percent (231 of 500) of the companies on the Fortune 500 index. Together, these companies generated $8.6 trillion in revenue in 2024 and employed over 15.4 million people worldwide. Arguably, immigration was a key ingredient that kept the US economy and its hegemony growing while other would-be “superpowers” floundered. Japan, for example, outpaced US economic growth from the 1950s through the 1980s, and many predicted that Japan would overtake the US in the 90s. Instead, Japan sputtered as its population aged, slipping further and further behind ever since. One reason is Japan’s restrictive immigration policies, which reduced its economic and innovative productivity.

Crime and Housing

Even if immigrants do not cause economic harm to the host nation, skeptics might counter, they still bring crime. Associating immigrants with criminal activity is not a new phenomenon; the target groups just change from one generation to the next. In 1891, Senator Henry Cabot Lodge demanded that the US close its borders, claiming that Italian immigrants were all “members of the Mafia…using murder as a means of maintaining its discipline.” Once again, however, the data does not bear out these claims. Comparative studies across multiple countries (e.g., the US, Europe, Canada, Australia) have consistently found no evidence that immigration increases the overall crime rate. In fact, first-generation immigrants are typically less prone to crime than natives. A comprehensive analysis of US incarcerations from 1870 to 2020, for example, found that immigrants were 60 percent less likely to be incarcerated than natives, and this gulf has been widening since the 1960s. In other words, immigration lowers the overall crime rate.

Now, an important caveat is in order. Immigration seems to work best for the host nation when it is legal and orderly. The data, admittedly, are less sanguine when it comes to large-scale disorderly migration. European data, for instance, finds elevated crime rates among refugees who fled their home countries in mass. When millions of refugees/asylum seekers show up at your border, you are getting a broad representative sample of human traits, perhaps even a comparatively worse-than-random sample of traits. In an ordered immigration environment, however, the host nation can cream-skim the best of the best. This means that there are certain, specific instances where immigration can lead to more crime, but this is more the exception rather than the rule.

Now what about housing? Immigration critics are also keen to blame migrants for driving up housing prices. If we “deport them all,” the saying goes, the rent will decline because the demand for housing will fall. There is likely some truth to this. Immigrants need a place to live, and they tend to settle in already densely populated cities. To the extent that new arrivals do raise the cost of housing, however, this says more about domestic policy failures than it does about immigrants. The problem is not the demand for housing; it’s the artificial restrictions that policymakers place on housing supply. This, of course, is a much broader problem and a subject in its own right.

Notably, there is a significant overlap between the most ardent anti-immigrant voices, those who blame immigrants for low wages and high housing prices, for example, and the pronatalists who advocate for large families. It’s difficult, however, for me to square this pronatalist position with simultaneous declarations that “our country is full.” This logical inconsistency bolsters my suspicion that many immigration critics do not raise their concerns about jobs, wages, crime, or housing in good faith, out of genuine concern for the well-being of the nation, but rather use them to conceal xenophobic feelings and intentions. They craft arguments against immigration that sound good, but fall flat with a modicum of inspection.

You may be questioning the research I cited above. Are immigrants superhuman? Are we to believe that immigrants are more likely to file a patent, start a business, get an advanced degree, and are less likely to commit a crime than native-born people? How could that be? The answer is that immigrants are a self-selecting group. The character traits required for success in life, like intellect, adaptability, and perseverance, are the same traits needed to successfully immigrate to another country. But if you still find the research unconvincing, ask yourself how the United States, a country that spent its first century with open borders, welcoming wave after wave of immigrants, from the Irish to Chinese, Greeks and Italians, and Mexicans to Indians, became the richest, most powerful country this planet has ever seen. If immigration from poor nations necessarily made the host country poorer and weaker, the United States would be an utter backwater today. It would not have risen from untamed wilderness to a world power, it would not have led the Second Industrial Revolution, let alone the Third.

Some may concede that while rich countries may benefit from immigration, it comes at the poorer countries’ expense. This is also likely incorrect. Modelling suggests that if every country eliminated migration barriers, growth everywhere would accelerate dramatically, unlocking anywhere from 50 to 150 percent of new economic output, or over 100 trillion dollars in new wealth. This means higher wages, more opportunities, and accelerated technological advancement for all. In fact, we don’t need to erase borders to unlock an unprecedented economic and innovation boost. Even a partial easing of migration barriers would increase global wealth by tens of trillions of dollars. So, while closing borders and further restricting immigration may be a popular policy, it is profoundly short-sighted. It leaves all of humanity, including and especially native-born people in wealthy nations, poorer and worse off. It is a harmful capitulation to those false zero-sum conceptions of where wealth and prosperity come from.

Managing Migration

With the above data in mind, we can say with certainty that closing borders is not a good idea. Orderly migration simply has too many benefits for the host nation and its citizens. Still, completely open borders seem politically unpalatable, so the question we must ask becomes two-fold: 1) How many immigrants should be allowed in, and 2) What character traits should any immigration system try to select for? These questions are much harder to answer, and every country has taken a different route to answering them. Most nations employ a discretionary immigration model in which a prospective immigrant applies, pays a fee, and bureaucrats determine eligibility for an entry visa, which can later be converted into Permanent Residence (a “Green Card”) and, perhaps eventually, citizenship. Countries vary considerably, however, in selection criteria.

The United States’ immigration system, for example, emphasizes family ties, whereby an established immigrant can petition for direct relatives to join them in the US. Some 81 percent of immigrant visas are issued to family members of American citizens, while only 5 percent are for employment or investment. Critics call this “chain migration,” but let’s call it what it really is: family reunification. The “chain” metaphor, I suspect, is used to provide cover for immigration skeptics who wouldn’t want to appear “anti-family,” betting that most Americans wouldn’t know better. Additionally, it’s important to understand that this process isn’t as easy as packing one’s bags and buying a plane ticket. It costs, at a minimum, thousands of dollars in fees and years of waiting (sometimes decades), medical exams, criminal history vetting, and reams of paperwork. Moreover, a large fraction of the people who would like to immigrate to the United States are still legally barred from doing so, a key factor driving illegal migration.

A competing immigration model, however, can be found just north of America’s border, in Canada. Many consider Canada’s immigration system to be a model that Americans should adopt. Canada admits migrants based on perceived “merit” rather than familial relations. In the Canadian system, immigrant character traits are assigned point values that, when added together, determine one’s eligibility for an entry visa. For example, a prospective migrant might receive a certain number of points for English proficiency, work experience, years of education, etc. Many countries, including Australia and New Zealand, employ a selection mechanism similar to Canada's, and notably, they all admit more immigrants per capita than the US does.

Point-based systems work well, but fail in crucial ways. Paradoxically, America’s less selective immigration system produces more disruptive inventors and entrepreneurs. This appears to be a consequence of points-based systems selecting for “safe” characteristics such as education credentials, work experience, and general risk aversion. Disruptive innovators, the kind that drop out of Harvard or leave a good-paying job to start a risky new venture, don’t fit this mold. Under a points-based system, for example, it’s unlikely that Elon Musk (Tesla/SpaceX), Sergey Brin (Google), or Jensen Huang (Nvidia) would have been able to establish themselves in the United States. This also means, in all probability, that these leading-edge companies wouldn’t exist or would have been founded abroad.

Market-Based Systems

This finding confirms my suspicions that it’s naive to believe that bureaucrats can successfully determine “merit” from a single immigration file. Who is to say, for example, that an uneducated, but skilled immigrant carpenter has less “merit” than one holding a PhD in French Literature? Is “low-skilled” labor any less crucial than “high-skilled” labor? These are subjective judgements that officials sitting at a desk, thousands of miles away, are not equipped to answer. I find it amusing that many of my fellow writers in this space, all of whom wouldn’t trust an official in D.C. to buy their groceries, are somehow willing to entrust them with assessing the future value of a human. No, the best immigration system would take the government out of the driver’s seat and rely more on the collective wisdom of the market.

Visa auctions are an obvious option here. In a visa auction, the government allocates a limited number of annual immigrant visas and allows anyone to bid on them. Subject to standard health and safety vetting, of course, the highest bidders have the right to select the individual to receive the visa. Merit is determined by the market, not by officials. A visa auction system, however, would require the government to accurately set the visa allotment. If the quota is set too low, only the wealthy can afford one. If it is set too high, society might not be able to adapt to the migrant influx. Nobel Prize-winning economist Gary Becker has suggested the inverse approach: an “entry tariff.” Here, the government sets a visa price, allowing demand to set itself. This approach, however, asks that the government accurately and fairly determine the price of an entry visa, still no easy feat.

In their book, Radical Markets Eric A. Posner and E. Glen Weyl propose what they call the Visas Between Individuals Program (VIP visa), which holds that any citizen or permanent resident can sponsor a single immigrant. In exchange, that immigrant would pay a monthly fee to the sponsor. This fee is uniform for all migrants who are also free to live and work as they please; they are not tied to the sponsor, and either party can end the partnership at any time. If the migrant loses their sponsor, however, they will have to find another or return to their country of origin. The fees are paid until a probationary period of perhaps 3-7 years is complete. The government sets the target population growth rate and allows the market to determine the price based on demand. We might think of this approach as a migration “congestion fee,” similar to a visa auction, but allowing for a more personal, human connection between the locals and immigrants. Personally, I find this proposal too complex to be workable.

Age-Scaled Entry Tariff (ASET)

While any market-based approach is likely to be superior to the status quo, I believe we can do better. While there are many traits that we might want to select for in an immigrant, those judgment calls are highly subjective. There is, however, one trait that we can say is fairly objective and measurable: age. The older the migrant, the greater the strain they will probably present on any existing welfare infrastructure, especially on the healthcare and retirement systems of the host nation. Additionally, the older the migrant, the less time they have to contribute productively to the local tax base that funds those systems. Older individuals also tend, as we have seen, to create fewer disruptive innovations, have a harder time learning the local language, adapting to local customs, etc.

For this reason, I propose a novel spin on the entry fee system, which I call the Age-Scaled Entry Tariff, or ASET system. The ASET system charges an entry fee that scales with a migrants age. The fee would begin at or near zero for children, as they have their whole working, innovating, and taxpaying life ahead of them. From that age, however, it would gradually increase, calculated to roughly recapture the tax revenue that would have been paid by that person had they lived in the country their whole lives. In the ASET system, the government isn’t tasked with arbitrarily setting a visa quota or a price. Instead, it only looks at tax data; hard numbers that are easily calculated. With the fees set, demand will vary naturally by age, with a strong preference for young migrants. Older migrants are still welcome, so long as they can pay the higher entry fee, which ensures the welfare system isn’t additionally burdened. This system ensures that all new arrivals are an asset to the host nation. And unlike a “merit-based” system, Musk, Brin, and Huang would still be welcomed. In fact, the ASET system would make it far easier for them to immigrate.

Selling visas in this manner might seem callous, but it’s a vast improvement over the status quo. The ASET system would be far more transparent and fair than any points-based system we could ever devise; the fee schedule would be publicly available, it would not be subject to political manipulation, or require a significant government bureaucracy. Government officials only need to collect fees and undertake health and background checks. Furthermore, broader immigration eligibility would catastrophically damage the human smuggling industry. For migrants, paying a border entry fee of $50,000, for example, is preferable to paying similar sums to human smugglers, only to live a marginalized life upon arrival. Additionally, this flexible and speedy immigration system would not need to build or maintain expensive border walls or armies of border agents.

By no means do I suggest that the ASET system is a panacea for migration woes or political tensions, but I do believe it’s a significant improvement over any plan or proposal I have yet seen. Ultimately, however, this would only be a half-step toward the broader goal of untethering people from their country of birth and unlocking their full potential. Long term, we might even consider adopting Nathan Smith’s “World Migration Organization,” modeled after the World Trade Organization, which works to ease global barriers to human migration. Ultimately, freer global migration is a necessary prerequisite to unlocking the full potential of all humans on Earth; a future where all can aspire to be the best version of themselves, regardless of the geographic location of their birth on the pale blue dot.

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