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H1-B Day: Why A Lottery And Not An Auction?

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From the WSJ.com (subscription required):

April 1 is a critical day for immigration policy. Today, U.S. Citizenship and Immigration Services (USCIS) begins accepting new H1-B visa petitions for the next fiscal year.

Created in 1990, H1-B visas allow companies to sponsor highly educated foreigners — architects, doctors, engineers, scientists among them — to work in the United States for at least three years. The H1-B program, which accounts for nearly all skilled immigrants admitted to work here each year, is capped annually at 65,000 for people with a bachelor’s degree or higher, plus an additional 20,000 for those with a master’s degree or higher.

Is this enough supply to meet market demand? Not even close. Last year, by the afternoon of the first day petitions were accepted, more than 150,000 had been filed. So USCIS rejected all petitions received after close of business the next day, and then allocated the 85,000 visas via random lottery. USCIS is forecasting a similar crush today for 2009 petitions.

Why in the world are we using a random lottery to allocate an incredibly valuable asset? Why aren’t these visas auctioned off, like any other government license on a valuable commodity? If we want to rationally allocate these visas where they produce the most benefit, shouldn’t they be auctioned?

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