Memorandum by the Migration Policy Institute
INTRODUCTION
This written evidence is intended to provide
a brief overview of points systems around the world, their major
features, why they were created, and how they fit into the economic
migration selection system of the UK. We conclude by suggesting
some key principles policymakers must consider to ensure a points
system will remain valuable to the UK.
The annex, a chapter on economic migration taken
from the forthcoming book by Will Somerville, Immigration under
New Labour, published in September 2007 by the Policy Press,
provides context and detail to this written evidence. The chapter
charts the history of economic migration policy in the decade
1997-2007.
POINTS SYSTEMS:
A GROWING TREND
An increasing number of developed countries
make it relatively easy for highly skilled foreigners, particularly
those that their labour markets need, to be admitted as immigrants.
With that goal in mind, Canada launched the first points assessment
system in 1967. Australia launched its points system in 1989,
followed by New Zealand in 1991 and the United Kingdom in 2001.
Several more European countries are considering
adopting such systems. For example, in the Czech Republic, the
Active Selection of Qualified Workers Project, introduced in 2003,
relies on the principles of a points system to stimulate permanent
immigration of young qualified people from select countries, mostly
from Eastern Europe and the Commonwealth of Independent States.
Criteria for obtaining points include previous work experience
in the Czech Republic, educational attainment, and language skills.
As many as ten other countries are considering points systems,
from South Africa to the Netherlands.
On October 24 2007, the European Commission
plans to issue a directive (proposed "legislation")
on the highly skilled, along lines that are likely to include
principles associated with points systems. Clearly, more and more
countries are deciding that admitting immigrants, selected for
the education and qualifications the receiving economies need,
and can presumptively benefit from, is a good economic and labour
market policy for both the short and the longer term.
WHAT ARE
POINTS SYSTEMS?
First and foremost, points systems are human
capital accumulation mechanisms. As such they are not about filling
immediate, specific job vacancies in the economy and have limited
application for such a goal. In essence, they award points for
certain individual characteristics that countries choose to value
most at a specific point in time. All points systems include a
minimum number of points that candidates must have to qualify
for entry; typically called the "pass mark."
Five criteria garner the most points across
all points systems in use across the globe:
A second tier of criteria do not appear in every
system and their valuation—measured in terms of assigned
points—typically lags far behind that of the top five. These
are:
— Previous or proposed earnings or
salary (an important component of the UK system).
— Employer nomination/job offer (often
in a "shortage" sector).
— Prior work experience or education
in the country of proposed immigration.
— The presence of close relatives.
— Settlement stipulations and considerations
(where one commits to locate).
— Investment with job creation responsibilities
and retirement.
When the UK points system, The Highly Skilled
Migrant Programme (HSMP), was originally introduced, in December
2001, it awarded a small number of points for language, age and
a greater number of points for education, experience and awards.
A variety of changes over the years, most significantly in November
2006, has made the system more focused on educational qualifications,
past earnings and age while language fluency has become a mandatory.
In doing so, the system moved from rewarding potential to rewarding
certificated achievement.
As implied, points systems aim to attract the
highly skilled. However, this is not pre-ordained. A points system
can also be used to select workers who are not necessarily highly
skilled. At present, policymakers are operating under the presumption
that those with high skills will better benefit the economy.
WHY WERE
POINTS SYSTEMS
CREATED?
This question is best answered by a brief examination
of the genesis of point systems, particularly in the country that
gave birth to them: Canada.
Canada's points system
Canada reached the decision to introduce a points
test partly to avoid the cycle of numerical feasts and famines
in admissions that its economy had been creating and partly to
distance itself from a selection system based on racial criteria.
After a few false starts (during which the system focused primarily
on addressing job shortages), its points system became a mechanism
to advance the broadest possible economic interests of the country
and get better "economic integration" outcomes for points-tested
immigrants.
These broad interests included a crucial social
and demographic component. In many ways Canada's points system
is predicated on selecting immigrants who will integrate into
society.
The objectives of points systems
However, not all points systems were introduced
for the same reasons. Unlike Canada, Australia has been relentlessly
focused on two objectives for points-tested immigrants: first,
they should bring a fiscal benefit (hence the young, well-educated
migrants favoured in selection who must also pass a stringent
health test) and second, they should get a job as quickly as possible
(hence the premium on English and incorporating job offers into
the points system).
New Zealand, as in so many of its policies,
follows the Australian mode, but with one crucial difference.
New Zealand policymakers spend much more time examining its emigration
flows as it is deeply concerned with losing skilled workers. It
therefore shares a focus on population flows with Canada, though
the difference is New Zealand is concerned with maintaining its
population, Canada with expanding its population.
The following table gives a summary of the objectives
behind the four major points systems around the world.
|
| Country | Date of introduction
| Objective |
|
| Canada | 1967
| 1. Demographics (nation building)
2. Fill job shortages
|
| Australia | 1989
| 1. Gaining employment rapidly
2. Fiscal contribution
|
| New Zealand | 1991
| 1. Balancing loss of skilled workers
2. Contribution to the economy
|
| United Kingdom | 2001
| Originally—attracting the next "Einsteins"
Currently—attracting youthful, qualified workers to contribute to the economy
|
|
Other deficiencies addressed by points systems
Points systems also became popular among government planners
as a means of addressing another concern. Higher education systems
that were not producing enough professionals with the human capital
characteristics their economies needed to grow and become more
competitive in the emerging global marketplace. This concern hints
at an ever-present debate in immigration policy: the balance between
importing skills and "growing our own" in the training
and education system. Elements in the HSMP, such as the introduction
in 2006 of a new criterion that awards graduates from the 50 top
business schools from around the world wishing to immigrate to
the UK an automatic score of 75 points, equal to the pass mark,
show that policymakers are keen to augment the UK system.
In passing, it is worth mentioning potential uses
of points systems. They include their potential to address the
illegal population in the UK (they become legal if they meet the
requirements) and to address the movement from temporary to permanent
status (the pre-condition for citizenship). The former has been
recently suggested by Senator Hagel ("The Immigrant Accountability
Act of 2007") for the US and the latter would be easy to
implement given the fact that tests on language and knowledge
of `Life in the UK' have recently been introduced for those immigrants
wishing to gain permanent residence in the UK. Thus, immigrants
who are already present but do not have the authorization to live
or work in the country could, by meeting the criteria of a points
system, earn legal status. Some of those who come as part of a
temporary worker program could also gain permanent residence through
a points system.
The politics of points systems
In addition to meeting policy goals, points systems have
helped governments meet certain political aims. For instance:
— They can inspire public confidence by appearing
to use universal, data-driven, and objective selection criteria
to advance clearly defined and easily understandable economic
and labour market objectives. Compared to most other selection
systems, points systems appear to avoid the "gamesmanship"
between employers and bureaucrats that afflict all case-by-case
selection systems.
— The appearance of impartiality discourages individual-level
challenges while the semblance of technical complexity and the
formula's focus on addressing longer term economic growth and
competitiveness priorities dampens concerns about adverse effects
on domestic workers.
— They can reassure the public that immigrants were
chosen through criteria that place the country's broadest economic
interests front and centre—and thus promote its position
in an increasingly competitive world.
— Most significantly, a points system conveys to
the public that the government is being proactive in anticipating
needs and manipulating entries in ways that put national economic
interests first; that is, that the government, rather than employers
or immigrant families, is in charge of what is arguably the most
important function of the immigration system.
Selection systems that rely on points assessments, however,
are not focused only on communicating with their own citizens.
They also serve as announcements to would-be immigrants anywhere
about the skills and preparations that could win them a work visa
to an increasing number of the most advanced economies in the
world. Developing countries around the world have altered their
systems to such opportunities.
Adaptability, flexibility, and simplicity are hallmarks of
the most successful points selection systems. Thus, points systems
can serve as incentives for creating the "virtuous circles"
of using the need to constantly adjust both the attributes the
system chooses to reward and the point values it assigns to each
to engage in systematic, targeted, and ongoing research and evaluation
studies on immigration.
THE EVER-CHANGING
POLICIES OF
POINTS
The countries that developed the points-system concept (starting
with Canada) have continued to rely on points systems but are
showing considerable flexibility by adopting several ideas from
elsewhere, particularly the United States.
Specifically, after a period during which job offers had
been assigned fewer and fewer points, Canadian and Australian
employers are increasingly allowed to bring the workers they need
from abroad, albeit initially as temporary workers. Hybrid selection
systems thus appear likely to dominate the immigrant selection
field in the future. Such hybrid systems would facilitate selecting
immigrants in ways that are most consistent with a country's traditions
and with the way in which its economy and labour market operate.
Points systems will nonetheless continue to be relied upon
by increasing numbers of states, including the UK, particularly
during the early phases of opening themselves to international
migration. The reasons are many. Not the least among them is that
these countries need a way to get out of the "no immigration"
traps they set for themselves over the last several decades. As
the UK matures as an immigrant-receiving society, however, firms
may need to be empowered to gain better access to the skills and
talents they need.
WHERE DO
POINTS FIT
IN THE
UK CONTEXT?
As noted above, the UK already has a points system (the HSMP).
The figures (from Professor John Salt, University College London)
show that those entering under the HSMP have risen steadily, from
1,197 in 2002 (the first acceptances date from 1 February of that
year), to 4,891 in 2003, 7,358 in 2004 and finally 17,631 in 2005.
The Joint Committee on Human Rights recently noted that a cumulative
total since its inception was 49,000. This expansion is likely
to continue, but remains small in the context of an inflow that
totalled 565,000 in 2005 (of which over 300,000 were neither British
citizens nor from the European Union).
The government's plan for a Points-Based System is
actually a misnomer. The Points-Based System is a hybrid,
five-tired economic migration selection system. Only tier 1 could
be described—by any reasonable analyst—as a points
system. The other four tiers are in fact more "traditional":
tier 2 is based on the former work permit system, tier 3 on low-skill
temporary worker schemes. Tier 3 is likely to be restricted while
the EU provides workers prepared to take up low-skill jobs in
the UK. Tier 4 refers to students and tier 5 might best be described
as miscellaneous, including various training and exchange programmes.
As a result, the UK is likely to only points-test approximately
1 in 20 of its immigrants. Of course, this is not as low as it
sounds. Canada, the points pioneer, points-tests fewer than a
quarter of its immigrants in an average year, which shows that
points-tested immigrants to Canada do not replace family immigrants
and refugees. Furthermore, in our view, this is not a bad thing:
points systems should be one of a number of tools in the policy
toolbox.
CONCLUSION: KEY
PRINCIPLES OF
POINTS SYSTEMS
AS APPLIED
TO THE
UK
Generally speaking, points systems are effective in creating
pools of skilled workers from which employers can hire some of
the workers they need. It is important for policymakers to understand,
however, that points systems are not mechanisms for meeting the
specific needs of specific employers within the narrow time frames
that most firms operate. But for any selection system to be effective,
the needs of employers must be placed at the centre.
The following five principles or recommendations for success
are based on our assessments of successful changes to points systems
around the world:
1. Points systems must be part of a hybrid system, where
other selection systems work in tandem. Indeed, they should not
be the centrepiece of any selection system (notwithstanding their
use for PR). This appears to have been understood by UK policymakers,
despite the misleading title of the reforms. However, the interdependence
of categories and cross-fertilization has not been significant.
2. Points systems must be governed in a flexible, easily
adaptable way as circumstances in the global economy change rapidly.
Light-touch regulation is therefore the most effective. This is
an inherent strength of the UK system but warning bells, such
as the new sponsorship requirements, indicate that this strength
may have become diluted in recent reforms.
3. Points systems, if they include the criterion of a
job offer, can partially resolve shortages in certain sectors.
If they do not have such a criterion, as currently in the UK case
(Tier 1), they will not be particularly useful in filling gaps
in the labour market. As a result, the advice of the Migration
Advisory Committee will be of limited value to deciding on tier
1 (indeed, their work will be focused on tier 2 of the system).
Essentially, our view is that filling job vacancies is best left
to market forces.
Nevertheless, we do see two crucial areas where independent
advice would be of value. First, ongoing research and value has
been crucial to the changes in all other systems. It is essential
this role is taken on effectively for the UK. Second, analysts,
rather than predicting shortages in particular occupations, might
better spend their time examining how best to build up particular
strategic sectors, useful to the UK, in the medium to long term
(perhaps environmental energy science or creative industries).
This could be easily incorporated into a points system in tier
1.
4. Points systems, particularly if they have the objective
of moving people into the labour market quickly in shortage sectors,
must take account of the needs of local labour markets. In the
UK this will require a new approach to governance that at least
includes local and regional leaders in consultative mechanisms.
At present, this does not exist.
5. For an economic selection system to be effective in
the long-term, two essential conditions will have to be met:
— First, the case must be made to, and understood
by, the public. New mechanisms such as the Migration Impact Forum
(MIF) and the independent Migration Advisory Committee (MAC) may
go some way towards achieving this, particularly if they are not
simply used as political cover, as they will draw in interlocutors
from across government and ensure that an independent evidence
base is amassed that has greater credibility than current UK government
statistics. However, its long-term viability will require much
more. Instead of borrowing the Canadian points model, it may be
wiser for the UK to borrow their system of consulting the public,
which requires politicians to explain the rationale for their
immigration system to public meetings across Canada.
— Second, the needs and aspirations of immigrants
(what `drives' them to the UK) must be understood. As the race
for talent intensifies, the UK will lose out unless it recognises
what makes it attractive, and, more to the point, what does not.
28 September 2007
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