Speculator-Chosen Immigrants

On immigration, the big political tug-o-war axis today is: more or less immigrants. But if you want tug the rope sideways, both to oppose polarization and to have a better chance of adding value, you might do better to focus on a perpendicular axis. Such as transferable citizenship, crime liability insurance for immigrants, or the topic of this post: who exactly to admit.

Even if we disagree on how many immigrants we want, we should agree that we want better immigrants. For example, good immigrants pay lots of taxes, volunteer to help their communities, don’t greatly harm our political or social equilibria, are not criminals, and impose fewer burdens on government benefit systems. Yes, we may disagree on the relative weights to assign to such features, but these disagreements seem relatively modest; there’s plenty of room here to work together to make better choices.

Note that, for the foreseeable future, we aren’t likely to approve for immigration more than a small fraction of all the outsiders who’d be willing to apply, if we were likely to accept them. So as a practical matter our efforts to pick candidates should focus on estimating well at the high tail of the distribution, for the candidates most likely to be best.

Note also that while a better way to select immigrants might induce us to accept more immigrants, those who are wary of this outcome tend to feel risk averse about such changes. Thus we should be looking for ways to pick immigrants that seem especially good at assuring skeptics that any one person is a good candidate.

To achieve all this, I suggest that we look at the prices of new financial assets that we can create to track the net tax revenue from each immigrant, conditional on their being admitted. Let me explain.

For every immigrant that we admit, the government could track how much that person pays in taxes each year, and also how much the government spends on that person via benefits whose costs can be measured individually. We could probably assign individual costs for schools, Medicare and Medicaid, prison, etc. For types of costs or benefits that can’t be measured individually, we’d could attribute to each immigrant some average value across citizens of their location and demographic type. When there are doubts, let us err in the direction of estimating higher costs, so that our measures are biased against immigrants adding value.

Okay, so now we have a conservative net financial value number for each immigrant for each year, a number that can be positive or negative. From these numbers we can create financial assets that pay annual dividends proportional to these numbers. If we let many people trade such assets, their market prices should give us decent estimates of the current present financial value of this stream of future revenue. And if we allow trading in such assets regarding people who apply to immigrate, with those trades being conditional on that person being admitted and coming, then such prices would estimate the net financial value of an immigration candidate conditional on their immigrating.

We could then admit the candidates for whom such estimates are highest; using a high threshold could ensure a high confidence that each immigrant is a net financial advantage. Those who are skeptical about particular immigrants, or about immigration in general, could insure themselves against bad immigration choices via trades in these markets, trades from which they expect to profit if their skepticism is accurate.

As usual, there are some subtitles to consider. For example, traders must be given some info on each candidate, and market estimates are more accurate the more info that traders are given. While I see no obvious legal requirement to do so, candidates could be assured some privacy. Immigration skeptics, however, might want to limit such privacy, to better ensure that each immigrant is a net gain.

Once immigrants become citizens, they of course have stronger privacy rights. While the government-calculated dividend values on them each year would reveal some info, there’s no need to reveal details of how that number was computed. To cut info revealed further, we might even wait and pay dividends as a single lump every five years.

In principle, a trader might acquire a large enough net negative stake in a particular immigrant that they have an incentive to hurt that immigrant, or at least to hurt that immigrant’s chances of achieving high net value. We might thus want to limit the size of negative stakes, at least after the immigrant comes, and among traders with opaque abilities to cause such harms.

The fact that net financial revenue can be both positive and negative complicates the asset creation. We might add some large constant to the financial numbers, to ensure that dividends paid have a positive sign. Or we might create two assets, one that pays dividends for the positive amounts, and one that pays for the negative amounts.

Some groups of candidates, such as a church, family, or firm, might be worth more if admitted as a unit together. We might then have trades on packages of assets for a whole group of candidates, trades conditional on their all being admitted as a unit. With a high enough estimated value of the group, we might then just admit such groups as units, even when we have doubts about individual members.

And that’s it, another pull-the-rope-sideways proposal designed to improve policy on a hot-button topic without taking a side on topic’s main dispute. Whether you want more or fewer immigrants, you should want better immigrants.

Added 1p 25Mar: If we could design individual measures of cultural assimilation and impact on cultural change, and assign dollar values to those measures, then we could include them in this proposed system.

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