One of the most important kinds of international trade is the trade in people that occurs when states compete for immigrants. Valuable immigrants confer great benefits on immigration state natives, and impose costs on emigration state natives. For value-decreasing immigrants, the direction of the wealth transfer is reversed. Because of this, both immigration and emigration states have a strong incentive to compete for valuable immigrants.

Too little attention has been paid to the market for migrants in the current debate over American immigration policy. Immigration opponents have argued for sharp reductions in the number of immigrants, and immigration advocates have argued for open borders. What is often missing from both sides is an acknowledgment that some immigrants are value-increasing, and some not, and that the goal of immigration policies should be to attract the former and repel the latter. In this respect, the United States has fared less well in the market for migrants than rival immigration states such as Canada.

This chapter argues that the United States should compete more effectively in the market for migrants. It should widen its doors to valuable immigrants, and close them to value-decreasing ones. Current proposals to cut welfare benefits to recent immigrants might usefully deter unwanted immigrants, but do not closely address the need to attract valuable immigrants. To do this, the United States should emulate Canada's immigration screening program. Under the Canadian “points” system, economic and some family preference immigrants are screened for the economic benefits they will confer on their host country.