Support from Elon Musk, Bill Ackman, and others was essential to President Donald Trump’s recent reelection. Immigration was a crucial issue to Musk and Ackman, who rightly complained about border chaos. Musk and Ackman emphasized how expanding legal immigration for skilled, entrepreneurial, and ambitious people would be a great boon to the United States. The Trump administration should listen to Musk and Ackman on the benefits of expanding skilled immigration to the United States.
Below is an explanation of the benefits of allowing in more skilled immigrants, an analysis of one problem with the current employment-based (EB) green card system for skilled workers, and several suggestions for expanding and streamlining their entry to the United States.
Benefits of Highly Skilled Immigration
Most immigrants come to the United States for higher wages regardless of their skill level. Those higher wages result from higher demand for their services in the United States compared to other countries. Labor demand is determined by the marginal value product, which is the extra revenue that a firm gains from employing one more worker or the economic productivity of the worker.
In simpler terms, immigrant workers have higher wages in the US because they are more productive here than in their home countries. Skilled workers are more productive and innovative in the United States than in other countries.
The wages from working in the US are so much higher than in developing countries that many have trouble believing it. An older paper by economist Michael Clemens helps show the gap for skilled workers doing the same jobs, on the same teams, and in the same firm when some were lucky enough to win a visa lottery and come to the US and the other workers on their teams stayed in India. The wage gap was $58,000 a year in 2009 for migrants who won the visa in 2007. Location matters for productivity.
Skilled immigrant workers in the US do not simply reallocate production here from their home countries, they increase global output because they are so much more productive here. This shows up in many forms but below will focus on how it boosts innovation to the economic benefit of the worker, American firms, the US economy, and the world. Conversely, immigration restrictions reduce innovation in the United States.
Immigrants are more likely to patent than native-born Americans, and their patents tend to be more valuable. Their contributions to innovation show up elsewhere, such as higher entrepreneurship, where they tend to start more firms at about an 80 percent higher rate than native-born Americans and at every firm size. Workers in their firms also earn slightly higher wages than workers at firms started by natives because of higher productivity in immigrant-founded companies. These aren’t new phenomena, as immigration is closely related to historical regional economic development in the US, and there was a drop in US innovation when Congress closed American borders to European immigration in the 1920s.
The evidence is so overwhelming that highly skilled immigration is beneficial to US production and innovation that it’s hard to find contrary evidence. For instance, 39 percent of Americans awarded the Nobel prize for physics, chemistry, and medicine were immigrants as of 2024. The three 2024 winners of the Nobel Memorial Prize in Economic Sciences were all foreign-born economists living and working in the United States, two from the United Kingdom, and one from Turkey.
At least two selection layers help explain why highly skilled immigrants are so successful in the United States. The first and most important is self-selection. Highly motivated and ambitious foreigners want to come to the United States. They have much higher earning potential here and face lower taxes and barriers to economic success than in other developed countries, so their chance of becoming very wealthy is higher here than in other countries. At the same time, reduced access to welfare here and fewer labor market regulations mean the less ambitious stay home or go to Europe. American immigrants from the Middle East and North Africa are more educated and have higher incomes than white native-born Americans, for instance.
The second type of selection is the highly selective US immigration system that lets in few skilled immigrants heavily tilted toward employer demand rather than arbitrary points awarded by Congress. The workers who come in are actually vetted by employers for their ability to productively work. Still, the EB green card system for skilled workers is beset by significant problems.
Most Employment-Based (EB) Green Cards Are Misallocated
The immigration system of the United States favors family reunification even in the so-called employment-based (EB) green card categories. Under current interpretations of US immigration law, family members of immigrant workers must use EB green cards. The American system isn’t unusual as Japan, Spain, and Ireland are the only OECD countries with more immigrants who enter on visa categories as workers than immigrants who enter on visas for family members.
Still, the difference is more significant in the United States than in other countries. Instead of a separate green card category for the spouses and children of workers, those family members get a green card that would otherwise have gone to a skilled worker. The allocation of green cards to the immediate family members of skilled immigrants wouldn’t be a problem if the number of EB green cards were uncapped, but Congress did limit them.
Ideally, Congress should abolish the cap, but a more palatable reform would be to allocate EB green cards to workers without reducing family-based immigration.
In 2023, 52 percent of EB green cards went to the family members of workers (Figure 1). The workers themselves received the other 48 percent. Those percentages were similar to 2020, 2021, and 2022. Some of those family members who received EB green cards are workers, and many are highly skilled since skilled people tend to marry other skilled people, so this isn’t a neat de facto division. Many of the family members of skilled workers are skilled workers themselves or will be when they grow up.
Another thing to note is that Congress capped the EB green card category at 140,000 per year, but the federal government issued 196,720 in 2022. The government was able to issue more EB green cards because immigration law allows unused green cards in other categories to be used for immigrants who have applied for EBs. Unused family-based green cards from 2021 were reallocated to adjust the statuses of EB green card applicants already in the United States on other visas in 2022, when 270,284 EB green cards were approved. This process allocated almost 60,000 additional green cards from the family-based to the EB green card categories in 2023.
EB green cards are in five categories separated by the type of worker or investor and their family members. EB‑1 green cards are for workers of extraordinary ability, outstanding professors and researchers, and some multinational firm managers and executives. EB‑2 green cards are for professional workers with advanced degrees and those with exceptional ability in the sciences, arts, or business. EB‑3 green cards are for skilled workers, professionals, or other workers. EB‑4 is for religious workers, certain broadcasters, some foreign employees of the US government, and others. EB‑5 is for a narrow class of investors. All EB categories also include their family members by convention, not according to statute or regulation.
Family-based immigration is important for social, economic, and ethical reasons. Additionally, skilled immigrants who want to come here on the EB green card don’t want to leave their immediate family members behind, and those who legally immigrated in the past shouldn’t have to wait longer by shoving more people into the family-based green card backlogs. To ensure that family-based immigration is not hindered by the numerical cap of EB green cards, Congress should either exempt family members or create a new green card category for them. This will prevent the reduction of workers by the same number of family members. By doing so, an additional 101,740 immigrant workers could have earned a green card in 2023, which would have resulted in a 107 percent increase without adjusting the cap number for that green card category.
Those who are already legally present and have received their green cards can adjust their immigration status from another type of visa, like an H‑1B or an F visa, to an EB green card. Seventy-five percent of those who received an EB green card in 2023, or 146,870, were already legally living in the United States (Figure 2). That’s down from 2021 and 2022, when 92 percent and 82 percent were adjustments of status, respectively.
Exempting those adjustments of status from the EB green card cap in 2023 would have boosted the number of highly skilled workers who entered from abroad from a mere 49,890 to 196,760 – an almost 4‑fold increase. Such a reform would allocate all EB green cards to immigrants coming from abroad. Figure 3 gives more detail.
Exempting adjustment of status from the EB green card cap would increase the number of green cards for the EB‑1 and EB‑2 categories the most. In 2023, 91 percent of immigrants who received an EB‑1 and 90 percent of those who received an EB‑2 were adjustments of status. Exempting adjustments of status from the cap would have increased the number in these two categories by 102,270. Workers on the EB‑1 and the EB‑2 are the most skilled, so increasing the numbers available would have the biggest positive economic effect while increasing the number of green cards in other categories through the trickle-down.
Exempting adjustments of status from the EB green card cap would also deplete the 1.8 million green card backlog imposed by the per-country caps. The backlog would fall at the speed of administrative processing unhindered by arbitrary annual caps. Such a reform would especially benefit Indian workers on the H‑1B visa by shortening their wait times without increasing the wait time for immigrants from other countries.
Exempting adjustments of status is a politically easier policy reform than tinkering with the numerical cap or getting rid of the per-country caps for two reasons. First, more exemptions would avoid the debate over which arbitrary number should be the new EB green card cap. Second, more exemptions would clear out the backlog more quickly without opening up the contentious political debate over winners and losers in any reform of the per-country caps. Congress should eliminate the per-country cap to be clear, but exempting adjustments of status would achieve the same goal of reducing wait times for Indian immigrants without increasing them for others. Likewise, Congress should increase the number of EB green cards just as Senator Rand Paul (R‑KY) proposed with the 2019 BELIEVE Act.
Here are some other exemption options for increasing the number of EB green cards issued annually without raising the overall numerical cap:
- Workers should be exempted from the EB green card cap if they have a higher level of education, like a graduate degree or a PhD.
- Workers should be exempted from the cap if they have a graduate degree or a PhD in particular fields, such as science, technology, engineering, mathematics, or medicine. The House version of the America COMPETES Act did this in 2022.
- Some workers who adjust their status should be exempted from the numerical cap in the way the H‑1B visa exempts 20,000 graduates of American universities from that visa’s numerical cap. Exempting all workers who earned their degrees at US universities is a good start.
- Workers who have wage offers in the top 10 percent of wages in their occupation, or in the top 5 percent of wages nationally, should be exempted from the cap. These workers are extremely productive, there’s no sense in making them wait longer.
- Workers who work in occupations with unusually low unemployment, say below half the national average, should be exempted from the cap.
- Immigrants who adjust their status in the EB‑1 and EB‑2 categories should be exempted from the numerical cap.
- Workers should be exempted if they show five or more years of legal employment in the United States prior to obtaining their green card.
- Workers should be exempted from the cap if they have waited for five years and are otherwise eligible for a green card.
- Anybody who has legally resided in the United States for a decade or more should be exempted from the cap. This would benefit many workers who started as students and then became temporary students, as well as the legal dreamers who grew up as dependents of temporary workers but who lost their status at age 21.
- Workers should be exempted based on the occupation they intend to enter. This is a problem because it requires the government to choose which occupations are deserving, but the benefits will outweigh the costs so long as it leads to a general increase in the number of skilled immigrant workers without decreasing them elsewhere.
- Workers should be exempted from the cap if they work in a non-profit research institution or a university, similar to how they are exempted from the H‑1B visa cap.
- Workers should be exempted for other national security or geopolitical reasons if they are from countries that the US government believes are a national security threat to the United States. For instance, exempting skilled workers from China, Russia, or Iran would reduce the number of skilled workers who could work in their defense industries.
- The United States should also exempt all EB green cards issued to Canadians and Mexicans because of the deep economic, social, and political ties between those countries.
- Workers should be exempted from the cap if they receive Schedule A exemption to the labor certification because they work in shortage occupations, which are currently just registered nurses and physical therapists as well as those with exceptional ability in science or the arts. The Department of Labor is currently considering changing that to include other occupations.
- Workers who meet the EB‑2 National Interest Waiver threshold should be exempted from the cap. These are for individuals the government believes are working on a project of national importance.
