The skill levels of immigrants to the US have declined in recent decades, giving rise to a debate on whether admission criteria should be family or skill based. In Discussion paper No. 1491, Alan Barrett examines how immigration admission criteria may have a different impact on the labour-market characteristics of immigrants from different countries. Using data from the US Immigration and Naturalization Service, he tests the model proposed by Borjas in 1987 and comes to the following conclusions:

First, relative skill levels of immigrants admitted both under family-based criteria and under skill-based criteria differ across countries of origin. The reason resides in the fact that for some countries, the immigrants' self-selection process leads to the immigration of individuals with above-average skills, while for other countries, the same selection process will lead to below-average skilled immigrants. This phenomenon can be explained by differences of income inequality between countries of origin relative to the US. Second, the pattern across countries provides an empirical vindication of the Borjas-predictions. Third, additional evidence has been found that the distance between origin and destination and the possession of English language skills also have an impact on immigrants' skill levels. The main policy implication is that the effects of changing admission criteria will differ across countries of origin, but in a way which is predictable on the basis of relative levels of income inequality.

The Effect of Immigrant Admission Criteria on Immigrant Labour Market Characteristics
Alan Bennett