Since most anti-immigration people do not take reports from U.S. universities or policy organizations seriously. Perhaps a report from someone who was previously at the World Bank would be of help.
Below are only excerpts from von Weizsäcker's report, which was released in 2006, but still highly relevant. The complete text can be found at:
http://www.strategie.gouv.fr/revue/IMG/pdf/article_JakobVonWeizsacker2.pdf
The author is:
Jakob von Weizsäcker, a German citizen, joined Bruegel from the World Bank inWashington (2002-2005) where he was Country Economist for Tajikistan.Previously, he worked for the Federal Economics Ministry in Berlin (2001-2002) where he headed the office of a junior minister and Vesta, a venture capital firm(2000-2001). Before that, he held research positions at the Center for Economic Studies in Munich and CIRED in Paris.
Bruegel is a business focused economic policy think tank in Brussels. Bruegel.org
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A European Card Proposal
by Jakob von Weizsäcker
Horizons Strategiques
Centre de'analyse strategique
July 2006
This contribution argues that the EU should open up to skilled immigrants through a points system via a European “Blue Card” granting access to its entire labour market. This European version of the Green Card could become a powerful complement to any national effort to attract top talent. In addition, students graduating with a Masters degree or equivalent from European universities or from top universities abroad should be automatically eligible for a Blue Card. This “Blue Diploma” would help attract young talent early. Finally, in future rounds of EU enlargement, higher-skilled workers should be
welcome immediately, provided they reach an earnings threshold: the “External Minimum Wage”. To motivate the discussion, a tentative explanation why countries like Germany and France are lagging behind in the global competition for talent is provided. In Section 2, the basic facts of migration, its skill content, and the increasing supply of skills worldwide are examined. In Section 3 the basic efficiency and distribution arguments for and against high and low-skilled migration are analysed. The impact of emigration - “brawn drain” and “brain drain” - on developing source countries is also discussed. Finally, Section 4 proposes potential policy options for Europe...
Over the coming years, migration rates and migration pressures might well increase further. Globalisation is rapidly “shrinking” the world without shrinking worldwide income differences quite as fast. There are concerns in Europe over this influx of immigrants, and low-skilled immigrants in particular. At the same time, to become a competitive and dynamic knowledge-driven economy as spelled out in the Lisbon agenda, Europe will need to become much better at attracting talent from the rest of the world. The European Commission has accordingly become active in this area (Box 1).However, progress has been slow. Some of the reasons for this have already been mentioned in the previous section. In addition, many relevant stakeholders still use problematic economic concepts to discuss migration, most importantly the “lump-of-labour” fallacy according to which the number of jobs in an economy is fixed. This policy brief argues that the issue of economic migration should instead be framed in terms of the skill level of immigrants.
...Immigration rates in the EU-15 and the US remained at relatively moderate levels during the 1960s,1970s, and most of the 1980s, as shown in Chart 1. Migration rates only shot up in the late eighties and early nineties. They rose again substantially in the early 2000s in Europe in particular, driven by immigration to the EU-15 from Eastern Europe. In addition, there is significant illegal immigration...
As one particular variant of the Blue Card, an entirely qualification-based “Blue Diploma” could be introduced. Any graduate of a Masters programme (or equivalent) from a participating university could be made eligible for a Blue Card by virtue of his or her degree. Such a comprehensive and predictable arrangement would greatly help to attract foreign talent to European universities and to the European labour market afterwards. In principle, it would make sense to extend Blue Diplomas to universities outside Europe also. For a start, the top 100 non-European universities, as measured by academic excellence, should also be included in the scheme.
Even from a development perspective, the Blue Diploma could turn out to be beneficial. By providing guaranteed access to the European labour market without requiring a permanent presence, circular migration in the spirit of the proposal by Weil (2006) would be encouraged. The Blue Card would in effect act as an insurance policy for graduates from developing countries in case they would like to take the risk of going back home. They could always return to Europe for a second chance.
Borjas (2003) has pointed out, most of the empirical studies that fail to find a significant distributional impact of migration focus on the impact of immigration on wages in small geographic areas. But such an approach fails to control for the endogeneity of migration. Migrants tend to be attracted to locations that have the most vibrant local economies and therefore typically the most attractive wages. Hence, any negative wage impact of immigration might be hidden by above-average wages in areas that manage to attract the largest numbers of migrants
Dangers of an Ethnic Underclass
There are signs that certain immigrant communities in Europe are developing into an ethnic underclass. It is clear that much better education and improved economic opportunities for the children of low-skilled migrants already in Europe, need to be provided. Migration policies can usefully complement such integration measures by creating a high-skill bias among fresh immigrants. Low-skilled immigrants already in Europe are the closest labour market substitutes to new low-skill immigrants. Hence, by reducing the inflow of additional low-skilled immigrants, the economic prospects of existing low-skilled immigrant communities could probably be improved. For the source country, low-skilled emigration or “brawn drain” typically improves welfare as it improves both efficiency and redistribution. This positive impact of low-skilled emigration is
reinforced by remittances. Low-skilled emigrants will often help to support poor relatives in the source country with their higher earnings abroad.
By contrast, the welfare impact of high-skilled emigration or “brain drain” is ambiguous. The source country may suffer from an adverse efficiency and distributional impact as a result of the brain drain. There will be fiscal loss since high-skilled emigrants will no longer pay taxes in their home country. And just as high-skilled migrants help to uplift their ethnic communities abroad, they could have made notable contributions to public life had they stayed at home.
But a brain drain is not all bad for the source country. The option to emigrate may substantially increase the expected returns to education, thereby improving education incentive. Finally, if migrants return to their country of origin, and many of them do, the skills and savings they have acquired abroad become a powerful force of development. Therefore, moderate levels of brain drain may actually be beneficial for the source country as, for example, argued in Beine et al. (2003).
Economic migration can loosely be defined as any cross-border migration that occurs to take on a better paid job. If pay is broadly in line with productivity, a move to a better paid job thus increases global economic output. This is the fundamental efficiency argument in favour of migration.
But most people would prefer to stay at home if it wasn’t for the money. Therefore, why not upgrade productivity where the people currently are instead of having people chase more productive jobs abroad? International trade and cross-border movement of capital are helping to do just that. According to the classic factor price equalisation theorem of trade theory, wages might in principle be equalised internationally through the trade of goods alone! However, there are important reasons why migration pressures are likely to persist even under free trade, full mobility of capital, and flexible labour markets
domestically.
First, many poor countries suffer from an inferior “production function” because of poor institutions.
Despite recent development success stories, upgrading poor institutions is a slow process. In thmeantime, workers in many developing countries will continue to suffer from inferior wages. Migration can short-circuit this development problem by allowing workers move to locations with a better“production function” immediately.
Second, agglomeration effects are an important rationale for migration. For example, France and the UK are large countries with fairly uniform institutions, free trade and free movement of capital. Nevertheless, workers continue to migrate to extremely expensive and crowded places like London or Paris. The reason is that people become more productive by virtue of geographic concentration. By moving to a large agglomeration, often in a foreign country, they can also hope to greatly improve the match between their skill and their job, thus boosting their productivity.
The findings of the previous sections are summarised...high-skilled migration tends to improve the welfare of the host country while the welfare impact of migration on the source country is ambiguous. By contrast, low-skilled migration has an ambiguous welfare impact on the host country while generally improving welfare of the source country. Hence, there need not be a conflict of interest between source and host country but there may well be. This raises the question how could the positions of host and source country be reconciled, if indeed there were a conflict.
complete text: http://www.strategie.gouv.fr/revue/IMG/pdf/article_JakobVonWeizsacker2.pdf
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