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share of tertiary-educated migrants, many end up overqualified for their jobs (Reitz 2011). This suggests that somewhere in the Canadian immigration system, there is a mismatch of supply and demand. The program seems designed to select highly skilled migrants, but the Canadian labor market either does not recognize immigrants’ skills or it simply demands less-skilled immigrants. Too many overqualified immigrants can be as distorting as too many underqualified immigrants. Allowing employers more say in the process could help reduce these mismatches. Points systems can include demand-driven components by granting additional credit to migrants with a job offer, as the Australian system does. This is complemented by a special visa type granted to visitors interested in obtaining a job, making the Australian immigration system more responsive to shifting labor market needs. Nevertheless, the system puts the government in the driver’s seat, with all the associated responsibilities and administrative costs this role implies. The biggest risk of government-controlled selection criteria is that they might fall prey to lobbying efforts. Such efforts could come either from the employers or from native workers. Demand-driven programs, by contrast, are less likely to be influenced by lobbying efforts because they decentralize the decision process, putting the employer in control. If well-designed, they also put the administrative and cost burden on the employer. The U.K. Work Permits program, for example, can issue a visa and work permit within 24 hours of the employer’s request— assuming the employer provides adequate documentation. Similarly, the U.S. H1-B visa procedure is initiated and sponsored by the employer for a specific migrant, though the bureaucratic procedures and costs are far more burdensome for the employer. The drawback of employer-driven programs, however, is that they require regulations to prevent employers from abusing the system and to ensure that employers hire migrants only in sectors and skills segments with labor shortages. For this, a so-called “labor market test” is usually administered, requiring the employer to first post the job vacancy for native workers; only after sufficient time has passed with the post unfilled can the employer turn to migrant labor. Europe can learn from the strengths and weaknesses of the Traditional Immigration Countries’ immigration policies. There is no one good program that addresses all the challenges of a well-crafted immigration policy. Points programs, employer-based programs, and General Agreement on Trade in Services Mode 4 programs all have their merits, but they serve different objectives. The underlying principle of a good immigration policy is its ability to respond to changing labor market needs. In this sense, European immigration policy has to become more selfish. But what immigration policies alone can achieve is limited. If Europe wants to win the global race for talent, it will need to make working and living in Europe more attractive for the world’s brightest. This can mean paying higher premiums on skills, increasing rewards for risk-taking, and encouraging entrepreneurship.
The European work model—reworked The countries covered by this report—members of the European Union, the EFTA countries, the candidate countries, and the Eastern European partnership countries—will lose 50 million workers between now and 2060. Today, the
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