The RAISE Act's Skills-Based Visas: A Good Idea Taken to Ivy League Extremes

The Trump Administration signaled its support earlier in the week for the RAISE Act, a piece of legislation reforming the legal immigration system sponsored by Senators Cotton & Purdue. Lyman Stone has a very good run down of the all the details. I disagree strongly with the bill's aim to cut the overall level of legal immigration--in a country like ours that's only going to get older for some time, the conversation should be oriented around the goal of increasing legal immigration--but here I want to talk about one policy mechanism in the bill I do broadly agree with: skills-based visas.

Our current system is complicated, and the RAISE Act does a lot (so again, do read Lyman's summary), but skills-based visas are a way of giving priority to green card applicants with certain markers of achievement. Each achievement earns a certain number of points, and applicants above a certain threshold (in the RAISE Act's case, 30 points) are deemed eligible. Putting aside the RAISE Act's unwise reduction in overall immigration, orienting the legal immigration system towards skills-based visas is a good idea because it facilitates more economic growth and better assimilation.

It should come as no surprise that the devil in these kinds of policies is in the details. The bill chooses to emphasize young people (e.g. 26 - 30 year olds get 10 points, those over 50 get 0), STEM degrees (8 points for a STEM masters, 13 points for a STEM PhD, law degree, or MBA from a US university... I'm not entirely sure why MBAs get weighted the same as PhDs), English-speaking ability (those scoring in the top 10% of the TOEFL test get 12 points, while those in the bottom half get none), and income (having a job lined up that pays more than 3x the state's median household income gets 13 points; less than 1.5x gets no points). There are also a couple of special provisions for extraordinary achievement (25 points for Nobel Laureates, 15 for recent Olympic athletes) and business investment (12 points if you invest $1.8 million in a new US business and maintain it for 3 years). Here is a summary of the criteria and the associated points (source):

A bunch of policy wonks I follow on Twitter had some fun Friday adding up our scores and seeing how we'd fare. For the record, I got a 32 (whew!). But I was surprised how many people I knew--smart Americans who are native English speakers and hold advanced degrees!--wouldn't qualify. Some didn't make enough money, in many cases because they live in DC and are in public service. Others had advanced degrees that nevertheless didn't qualify as STEM, so only got credit for their bachelors degrees.

This made me wonder: how many current US citizens would qualify for a skills-based visa under the RAISE Act?

To answer this question, I used the IPUMS extract of the American Community Survey (ACS) for 2015. I coded all US citizens based on the points assigned in the latest draft of the bill, which you can read here (the points criteria start on page 27). I had to assume that all higher education degrees were from US institutions (biasing points up). I also had to make judgements about what degree fields qualified as STEM and what each person's TOEFL scores would land based on self-described English ability. I also can't account for the extraordinary achievement or business investment criteria (sorry Nobel Laureates). I think my assumptions were reasonable and that the results are not meaningfully sensitive to alternatives, but you can judge for yourself by viewing my Stata code here.

The results surprised me:

• Among current US adult citizens age 18 or over, only 2.1% (4.8 million in 2015) would qualify for a skills-based visa under the RAISE Act. At the risk of being too pat, I'll note that Harvard's admittance rate last year was 5.4% of applicants. 

• Of the 750,000 US citizens who naturalized in 2014 in the ACS, only 20,000 (2.7%) would have qualified under the RAISE Act. It's important to note that not all 750,000 would have been admitted under employment-based visas: many for example likely came because of family, and some may have gotten visas through the diversity lottery.

• Among both 1) all US citizens and 2) citizens who naturalized in 2014, the key factor pushing them above 30 points on average is income. English scores top off relatively quickly, as does age. Greater education gives gradually greater advantages, but the steepness of the income criterion (only those who individually make a salary of 150% of the state's median household income or more get any points from income) means the skills-based visas disproportionately benefit immigrants going into very high-income industries and occupations, as well as those who settle in high-income cities. 

• Finally, among the 4.8 million US citizens who would pass the threshold, 80% are in management or professional occupations...

• ...with the largest shares in professional services, finance, and manufacturing.

• Within the professional services industry, almost half are in medicine, another 13% are in law, and 12% are in higher education. 

Now obviously, these findings may strike many as a feature, not a bug. It depends a great deal on your views of immigration policy. Also, the pool of immigrants is itself influenced by the rules, so the conclusions we draw from these cross-sections shouldn't be strong. 

But it is worth asking: are these where America's greatest needs are? For some of the industries and occupation, arguably yes, but e.g. law and finance are not my ideas of industries hurting for extra workers or where a thoughtful immigration policy would want to augment the (shrinking) US labor force in the future.

I still think skills-based visas are a good way to orient immigration, but the restrictions to the criteria and weights in the RAISE Act right now strike me as too narrow for America's good, to say nothing of the reductions in overall immigration imposed elsewhere the bill and not offset by more employment-based visas. Luckily these can all be changed by Congress. I hope they do.