The Increasing Importance of Occupation-Restricted Immigration

“Occupation-restricted” immigration policy legally restricts immigrants to certain occupations specified at the point of entry. Occupation-restricted immigration policy contrasts with “skill-based” immigration policy, which admits high-skilled immigrants and allows them to work in the occupations of their choosing. Skill-based immigration generally lowers the wages of the subset of native workers who compete with immigrants in the labour market. In contrast to skill-based immigration policy, a well-designed occupation-restricted immigration policy can raise wages for all native workers regardless of skill. Because occupation-restricted immigration is less likely to lower the wages of native workers than skill-based immigration, occupation-restricted immigration is less likely to provoke political backlash. For this reason, I predict that occupation-restricted immigration will become more important relative to skill-based immigration in the coming decades. Increasing occupation-restricted immigration is likely to increase the wages of native workers and to improve the fiscal position of the government. At the same time, increasing occupation-restricted immigration may increase social tensions by creating a semi-permanent, unassimilated underclass of immigrant workers and may raise difficult questions in ethics, law, and foreign policy. The government should begin to prepare for these possible consequences now.