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Ray Marshall

Marc Tucker interviews Ray Marshall on the links between immigration policy and education policy.  Marshall is Professor Emeritus and Audre and Bernard Rapoport Centennial Chair in Economics and Public Affairs at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, and former U.S. Secretary of Labor.  Marshall, a labor economist, is an expert on international education and immigration issues.  Recent publications include 2009’s Immigration for Shared Prosperity: A Framework for Comprehensive Reform and 2011’s Value Added Immigration: Lessons for the United States from Canada, Australia and the United Kingdom.  Marshall is Co-Chairman of the Board of Trustees of the National Center on Education and the Economy.

Tucker: Why should education policymakers be interested in immigration policy?

Marshall: Education policymakers should pay attention to immigration policy for a number of reasons.  In almost all advanced economies, immigrants will be an increasingly important part of the population and the workforce.  This means that all of these countries will have many students who are also immigrants, depending on the extent to which they rely on immigration to add to their populations and their workforces.  So if schools want to educate all children to a high standard, they will have to pay particular attention to the characteristics of immigrant students.

Countries’ experiences with immigrant students have been very different.  For example, if you have a good immigration selection system as the Canadians do, then you will have immigrants who are strong students.  The Canadians, in fact, claim to have the highest-achieving second-generation immigrant students in the Western world.  Part of that is due to the way they select immigrants, and part of it is due to the vast improvements they have made to their education system since the 1970s.  They understand, when selecting immigrants, that they are choosing future Canadians.

Other countries have immigration policies that are producing large numbers of very hard-to-educate students which has important consequences for the cost of education and for the quality of the national workforce and for those countries’ competitiveness, especially when immigrants will constitute the main source of growth in the national workforce, as will in fact be the case in many industrialized countries.

Tucker: In writing your new book, why did you choose to study the immigration systems in Canada, Australia, and the United Kingdom?

Marshall: For some time, Canada and Australia have been widely viewed by experts in this arena as setting the benchmark for national immigration policies.  The UK has been catching up rapidly, by building on their experience, and may be ahead of them in some areas.

All three countries had long had policies heavily favoring immigrants who had family connections.  However, the intensive globalization of the economy in the 1980s changed that in Canada and Australia.  When the closed economies of the former Soviet Bloc countries, as well as China and India joined the global economy, they doubled the workforce involved in the global trading system—now about 3 billion workers—almost overnight.  These new workers were suddenly in both direct and indirect competition with workers around the world, including Australia and Canada.  That had a profound significance, because the countries entering the global trading system had very large numbers of well-educated, highly motivated people who could either migrate to the developed countries, or be employed where they were by global firms.  Almost overnight, what had been the globalization of product markets suddenly became the globalization of labor markets.  People with high skills were willing to work for below-market wages.  They were eager to have the standards of living available in industrialized countries, and were willing to work very hard to do that.

When that happened, both Canada and Australia took action.  In a competitive market, wages will tend to converge.  The question was in which direction would the convergence go?  The Australians saw that the most likely outcome would be that their wages would move in the direction of the wages in the low-wage countries.
But the Australians thought there was another possibility, one in which everyone’s positions could improve, but in which wages in the developing countries would improve faster than those in the developed countries.  I call this a “value added competitive strategy,” which was an alternative to a direct cost competitive strategy.  In this model, countries like Australia would not compete on the price of labor, a game they could only lose, but on the quality of their products and services, the productivity of their workforce and their capacity for innovation.  This would earn them a premium in the market, because they were producing things that could not be produced everywhere.  To do that, they needed a world-class education system, but also a value added immigration system in which they would import highly skilled workers to fill jobs that domestic workers could not fill.  That became Australia’s basic strategy.

To do this, they dramatically reduced the proportion of visas allocated for family reunification, and greatly increased the proportion allocated for highly skilled workers and entrepreneurs who had skills not readily available in the Australian marketplace.  They also had to coordinate education policy, workforce development policy, economic policy and immigration policy.  This is important because otherwise what is being done in one area can diminish what is being done in the other areas.

Tucker: What Australia did was very different from what countries like Germany did when they brought in low-skilled guest workers to fill economic gaps.

Marshall: Yes.  The immigration world learned some big lessons from the Bracero program in the United States, which brought in low-skilled Mexican workers for agricultural work, and the German guest worker program.  Low-skill guest workers are never temporary.  It is extremely hard to prevent guest workers from becoming illegal immigrants, especially if there is a vast different in the living conditions in your country and their home country.  Legal low-skill temporary workers quickly become illegal permanent workers because they do not want to go back to the poor conditions in their home country.  Many employers preferred these workers for their hard-to-fill jobs that pay low wages. They make very good workers because they work hard and are scared.

When you have unauthorized workers unable to protect themselves against their employers, or even authorized workers willing to work for low wages, they undercut the wages for all workers in the country.

Tucker:  In Value Added Immigration, you write that the initial response to globalization in Canada and Australia was to establish a minimum level of education required for all immigrants.  Why did they choose this strategy, and why did it fail?

Marshall: They chose this strategy because the economists argued that, with a high level of education, immigrants could adjust to any type of economic environment.  But first Australia and then Canada discovered this was not true.

In the late 1990s, the Australian government made dramatic changes in the system. There was a fairly large burden on their welfare system because they had selected immigrants who were unable to support themselves due to the mismatch between their skills and the skills and characteristics that employers were looking for in the workforce.

Both countries had strong data and research – much better than what is available in many other countries, and were able to use this information to discover which types of immigrants were most likely to succeed in the long run.  They knew they were not importing workers; they were importing future citizens.  What they found after doing a great deal of study was that the most successful immigrants were people who had skills that were in high demand in the economy, and people who had a high command of the language.  There was a direct and strong correlation between the degree of language competence, as measured by an international language test, and how well people did in the economy.  Command of language was most important for highly skilled professionals.

Those who came in with highly skilled family members were much more likely to succeed than those with low-skilled family members.  Age, too, made a lot of difference; it was possible to be either too young or too old to succeed in the economy.

A points system was developed in Canada in the 1960s in which immigrants earned points for various characteristics to allow them entry.  This system was adopted by Australia in 1989, and has since been adopted by several other countries.  The points system is a way to quantitatively calibrate the characteristics that help immigrants be successful in the economy.  That was a valuable selection device for a number of reasons.  First, prospective immigrants could go online and determine whether they were qualified to enter the country.  This decreased the number of applications.

It is also a very flexible system, because if you have too many people immigrating to your country, you simply raise the total score necessary to make a successful application.

It is flexible because it is research-based.  Just this past year, for example, Australia eliminated all points awarded for a master’s degree, because their research showed them that immigrants with a master’s degree turn out to be no better off, economically, than immigrants with only a bachelor’s degree.  So they decided not to award points for that.

The research showed that, if a prospective immigrant had a firm job offer, their chances of success were much greater, so Australia, Canada and the United Kingdom decided to award them a large number of points for that.  But the offer had to be for a job that was first offered to residents of the country, or it had to be on the shortage list.  In the British system, an immigrant needs to have 10 points for command of language, and 10 points for demonstrating that they can support themselves.  You need 70 points overall to be admitted.  If you have a job offer from the shortage list, you automatically get 50 points.

In all countries, however, just being qualified will not get you in.  The test they have all learned to apply is what in Britain they call the “sensibility test.”  That is, they ask whether immigration is the best way to fill that particular vacancy.  They look at employers, and if they are not making a good-faith effort to recruit and retrain domestic workers, they cannot import the immigrant.  That prevents immigration from substituting for the domestic workforce.

Australia now has over 20 years of longitudinal data on the characteristics that help people succeed.  This data shows that, over 10 years, most of the immigrants they have become positive contributors to the economy.  The only ones that fail to do so are the uneducated family members of immigrants – This is particularly true of uneducated parents who come in with skilled immigrants.

Tucker:  We are seeing very severe voter backlash against immigrants in many industrialized countries.  What has been the story in the countries you are describing, those with value-added immigration systems that emphasize high skills in their selection process?

Marshall:  In all of these countries, the population is generally supportive of the immigrant population.  This is largely because the selection system is designed to bring in people with skills that complement the skills of the native population, so the immigrants do not compete with the native population for jobs.  It is also because the immigrants are much less likely to become a drain on the country’s welfare system, because they are much more likely to have jobs and pay taxes.  And it is also because, especially in the cases of Canada and Australia, immigration policy is designed to deal with the kinds of cultural conflict from immigration that is now a burning political issue in Europe.  Canada and Australia require immigrants to pledge that they understand that their new host country has certain values that an immigrant is expected to agree to, knowing that the failure to do so would be a violation of the pledge. Few have ever been penalized for violating it, but the pledge has created an environment in which immigrants respect the rule of law and such values as the equality of men and women, that all creeds and religions are expected to be tolerant of others and so on.

Tucker: In your book, you talk about two stages of temporary workers and how that relates to the higher education system. Can you tell us more about that connection?

Marshall:  One of the best sources of value-added immigrants for any developed nation is the foreign students who come to study in that nation’s higher education system.  This is true both because they are a source of revenue for that country’s education industry, but mainly because they typically come with language proficiency, high skills and strong cultural knowledge.  So they developed a two-track system.  Immigrants could come in through the regular points-based system or another system that allowed people who both earned a degree from an Australian or Canadian university and had the other required characteristics to apply for status as a permanent resident.  But they didn’t want people to use the higher education system as a way to gain permanent residency, so they required such people to go home first and then apply.  Eventually they decided that process was self-defeating if they wanted highly qualified people who knew the language and were familiar with the values and customs.  So they let qualified graduates of their institutions apply directly.  In Canada, such people could get permanent residence without going through the points system, either for skilled workers or students.  At first, they were reluctant to take skilled workers on the basis of their vocational qualifications, but they found those people actually had better economic performance than regular university students so they started taking them.

It is important to view the children of immigrants as future Canadians, Americans, Australians.  You are building your future with those kids.  That’s the reason you need to pay attention to their education and to the selection of their parents.  The United States does not do this and has the lowest level of literacy in our foreign-born population of any OECD country as a result.  We are building future problems for ourselves with such policies.

The countries with value-added immigration policies, unlike our country, are using their immigration system for the same purpose as their education system—to produce a highly educated, highly skilled population that will be able to support themselves and to contribute to increasing the wellbeing of the entire population.  In doing so, they are not only bringing in adults who can contribute personally, but they are also bringing in children who will be far easier to educate to a high standard.  In an era in which all industrialized countries are going to have steadily increasing proportions of immigrants in their populations, immigration policy might be thought of as an extension of both education policy and economic policy.  All three are vital elements of successful competitiveness policies, which will by definition determine whether the incomes of the citizens of the industrialized countries will rise or fall in the years ahead.