Tuesday, November 18, 2008

Case for a migration policy discriminating against entrants with above-average health costs

The recent case where parents with a child having Down's Syndrome were excluded from migrating permanently to Australia has aroused much emotion.  It is widely seen as discrimination against disabled people. It is nothing of the sort. It is discrimination against immigration applicants who may not provide net economic benefits to Australia if they are awarded migrant status.

The lifetime cost of supporting a Down's Syndrome child at a discount rate of 5% was  estimated 10 years ago at $235,000. With a public health system most of this cost will fall on the taxpayer.

Having new migrants usually increases the value of assets and non-wage incomes received by Australians so we derive economic gains from immigration. But Australia provides many public goods - social security benefits and health benefits are prominent examples.  There are incentive reasons to suppose that those with above-average health costs and poor employment prospects have incentives to migrate to Australia.  The restrictions placed on the immigration intake are those designed to screen against such 'adverse selection'.

I know that when I post these remarks that commentators will describe me as heartless in rejecting these children. But  I am not.  About 1 in 600 live births is a Down's Syndrome child so there are around 250,000 such children born per year around the world.  Any interest in improving the welfare of these children would be best addressed by intensifying pre-screening and treatment options rather than admitting a handful under our very limited migration quota.

Families who wish to bring Down's Syndrome children (or family with any preexisting health condition) to Australia should find it possible to guarantee private provision of all extra health costs.  But this is not feasible in Australia because 'Bleeding Heart' do-gooders will never allow enforcement of such a contract.  This lack of resolve means that people with pre-existing medical conditions will continue to be unfairly excluded from immigrant entry.  Being tough here - the alternative suggest - implies being reasonable and kind.

8 comments:

rabee said...

Harry

You may be shocked to know that the Howard government (yes that's John W. Howard---subject, I gather, of unusual and unnatural affections on your part) signed the Convention on the Rights of Persons with Disabilities at the United Nations on the 30th March 2007.

Here is Article 18 - Liberty of movement and nationality (seems to me we're not meeting our international obligations)

1. States Parties shall recognize the rights of persons with disabilities to liberty of movement, to freedom to choose their residence and to a nationality, on an equal basis with others, including by ensuring that persons with disabilities:

Have the right to acquire and change a nationality and are not deprived of their nationality arbitrarily or on the basis of disability;

Are not deprived, on the basis of disability, of their ability to obtain, possess and utilize documentation of their nationality or other documentation of identification, or to utilize relevant processes such as immigration proceedings, that may be needed to facilitate exercise of the right to liberty of movement;

Are free to leave any country, including their own;

Are not deprived, arbitrarily or on the basis of disability, of the right to enter their own country.

hc said...

Don't be silly Rabee.

This is motherhood stuff.

How do you do decide to admit under a limited immigration quota?

Certainly UN values will carry no weight.

rabee said...

We signed the convention right?

Morally for me ratifying a convention on the rights of persons with disabilities is as serious and as important as ratifying say the Geneva convention on the treatment of prisoners of war.

Children with disabilities should be treated like other children. It's their parents who are applying for immigration and they should be assessed not the kids.

We don't asses kids of applicants for anything but disabilities. Why?

BTW, what's the social cost associated with a boy with ADHD or some other behavioral problem? Why don't we test for that?

Francis Xavier Holden said...

In this particular case it seems that a pretty simple calculation might show that over x years the father and mother might save y australian lives or z x 100 Mallee farmers from skin cancer that WOULD NOT be saved if the doctor was not there. Should be worth at least $235,000 over the next 30- 40 years.

In this case is in entirely possible, tho not necessarily certain, that the father might not be easily replaced. So his going may leave a gap.

Harry - what is the cost of a smoker to the Oz taxpayers and are smokers denied immigration?

hc said...

Of course you should be able to secure a doctor with the same attributes without the extra costs. By the way the externalities here are much less than the cost of the service.

There is a proposal to restrict entry of smokers into NZ but no such suggestion here. I think smokers should be excluded.

Blandy said...

I think it all depends on who's utility we intend to maximise.

Harry's argument holds if we are concerned about the utility of people in Australia only. We effectively let people in only if they make the locals better off (or at least indifferent), thus reaching a Pareto efficient outcome between the locals and the immigrants.

In the case of disabled immigrants coming in to the country, they impose a higher cost onto society and therefore their immigration may only be efficient if there is some sort of cash payment to the locals, otherwise the locals lose out.

Either we exclude these people from immigrating to Australia (as is currently the case), or make sure they do not impose any externalities on the existing population.

Our government already attempts to bring skilled workers to Australia with attractive offers; how is this any different from requiring disabled people to pay more?

hc said...

Blandy, You are right it is the same principle but bringing skilled people in not only conveys skill externalities - it also is a distributionally superior policy because its income impacts are on the well-to-do not the poor.

Anonymous said...

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