Many points, little effect? An Australian-style immigration system has its pitfalls

In times of labour shortages and demands for more controls to be imposed on migration, some are calling for Switzerland to introduce a points-based immigration system similar to those in Australia and Canada. The idea sounds appealing: objective criteria will be used in future to determine which individuals are allowed into the country and which are not. Potential immigrants will each receive points based on criteria such as their level of education, language skills and professional experience. In addition to Australia and Canada, New Zealand and, since Brexit, the UK also have similar systems. Their objectives are clear: immigration should be restricted and focus on highly skilled individuals, who generally integrate more quickly and therefore potentially make a greater contribution to the economy.

In a policy brief aimed at decision-makers in the fields of politics, public administration and organisations, I discussed the advantages and disadvantages of existing points-based systems with Professor Santosh Jatrana, a prominent Australian migration academic who is very familiar with the Australian admissions system from both her research and personal experience. My takeaway from this collaboration was that such a system is definitely beneficial in some respects. Under a points-based system, for example, it is less likely that immigration will have a negative impact on labour markets. This is because immigrants tend to complement the domestic labour force, thereby preventing large influxes of immigrants which could overwhelm labour markets. A well-designed points-based system also promotes equal opportunities and makes immigration decisions more transparent by applying the same criteria to all applicants.

However, a system under which the government plays a key role in the selection of immigrants has clear disadvantages – particularly for companies and, possibly, for the economy as well – compared with the current immigration system in Switzerland, under which firms and their recruitment decisions control immigration.

There are at least three reasons for this. Firstly, in practice it is not easy to align the system’s selection criteria with the specific employment opportunities available across the country. Labour markets are dynamic, and shortages identified today may no longer exist tomorrow. It is also difficult to map the complexity of labour shortages, which do not always affect an entire profession. There is often a lack of workers with a specific combination of qualifications, skills, specialist training and certain ‘soft skills’ that are difficult to measure objectively. Under a points-based system, after all, it is not possible to dictate to immigrants where they should settle. Consequently, they may not migrate to where the demand is greatest.

A second major disadvantage of this system is that most immigrants enter the points-based system without a job offer. Although migrants with a job generally receive more points, in reality the process is too lengthy and too uncertain for many companies to make candidates a job offer before they enter the country. Under points-based systems, therefore, migrants often face a lengthy job search, underemployment and difficulty in having qualifications recognised once they have entered the country. In fact, the probability of migrants having a job within the first one to three years after entry is higher in Switzerland than in most countries with points-based systems.

A third weakness of this system is that it does not adequately meet firms’ high demand for low-skilled labour – for example in sectors with seasonal or short-term spikes in demand. The experience of countries with points-based systems shows that labour shortages in these areas do not disappear despite the points-based system. These countries therefore have additional immigration programmes for low-skilled workers such as seasonal labour in agriculture, tourism and construction. Although these programmes help to rectify the shortage of unskilled workers, they usually also provide opportunities for permanent entry. In addition, such programmes often restrict the rights of migrant workers, which – as recent research shows – can have a negative impact on the local workforce because, for example, wage levels in a particular industry come under pressure. The need to supplement any points-based system with immigration programmes for low-skilled workers therefore poses the risk that the key objectives of this system – namely to limit immigration and target it at highly skilled workers – will not be achieved.

On the whole, therefore, there are compelling reasons for not introducing points-based systems. The fact that they are not a panacea and can fail to achieve their objectives was recently demonstrated in the UK, where immigration increased – rather than decreasing – following the introduction of a points-based system.