Thursday, 29 January 2015

Student Visas revisited

While it is true that students can get a 12-month open work visas and that students with job offers can get longer-term visas, it's also true that employers will be reluctant to offer jobs to international students soon to graduate where it then means they have immigration hassles afterwards: they can't tell that the student on an open work visa will get the longer term visa, and they risk losing the new employee if the immigration process falls over. Permanent residence by default, barring failure of a criminal background check, would get rid of this problem. Further, because potential students would have certainty that they would be able to stay here on graduation, they would rank New Zealand schools a few places higher in their international applications.

The Timaru Herald's revisited that call. I got an email from them the other day asking if I still liked that idea; they've been finding employers having big problems in getting skilled staff who like the idea of granting permanent residence to new graduates. They reported on it today.
A South Canterbury employer says an economist's proposal to grant international students permanent residency on graduation could ease skill shortages.
Economist Dr Eric Crampton says the Government should automatically grant permanent resident status to foreign students who graduate with Bachelor's degrees from major New Zealand universities.
Crampton, the New Zealand Initiative think-tank's head of research, said the scheme could "do double duty in reducing skills shortages and in supporting the tertiary sector" by encouraging international students, who pay relatively high fees compared with domestic students, to study in New Zealand.
Polarcold Stores chief executive Kevin Cahill said yesterday the proposal "makes a lot of sense".
They note that Jo Goodhew has referred the idea over to Immigration  Minister Woodhouse's office, who punted to MBIE. I hope that MBIE puts some weight on that:

  • Students on the 12-month open work visa still have huge problems in securing work because employers just cannot tell whether the student will be able to stay on. One of my former students at Canterbury was in on a student visa. If there were any student I'd ever taught on whom I'd place a bet on "will be incredibly successful in business", it was him. Ridiculously good. And while on a student visa, his English was superb - better than most Kiwi students. And he still butted up against employer reluctance to take on that work visa risk. This is a real and significant barrier to even really really great students who'd add just a ton of value to firms. 
  • Students graduating and wishing to be entrepreneurs cannot do it under visa requirements demanding that they have employment;
  • The policy would bring in more international students, helping to cross-subsidise domestic students.
I put strong odds on the Immigration bureaucracy's telling the Minister, "Oh, it's more complicated than you think, we'd be outsourcing immigration policy to the Universities, we'd need to be policing the Universities to make sure their processes are robust, and the students can already get that open work visa so there is no problem to be solved." All of that's avoidable: TEC knows how to police this stuff subsequent to the CPIT Cool-IT rort. And the open work visa really doesn't seem to be enough.

I hope MBIE runs with this one. It could do a lot of good.


  1. This idea is worth exploring but the 3 big issues for me are employer bias, graduate skill deficiencies and likely aberrant behaviour by unis.

    Employer bias is a key one, as the visa process is probably less of an issue than all sorts of discriminatory behaviours (some reasonable, some not) by employers that may rule out international grads. This afternoon I was reading the following Australian report that is a good read (if long)

    International graduate skill deficiencies are quite real - many grads still have poor English, or soft skills, or maybe haven't been trained that well for the labour market in the first place.

    Aberrant behaviour is less likely at unis than at other providers, but it still happens. Australia is awash with foreign accountancy grads who won't be employed by anyone in Australia, but the uni programmes are still marketed hard. The UK cracked down last year on some UK universities running fairly useless programmes in London.

    Overall, I think there's a high risk of creating a bubble effect here where we have more students come in but they're not then employed when they graduate, leading on to a bust. The underlying issue is whether international students can be better integrated into the local market. When demand for international student graduates starts to exceed supply, then there would be a much better case for your solution. At the moment, grad supply exceeds employer demand. Your proposal might well improve allocative efficiency, but the supply increase might swamp that effect.

  2. The way I'd imagined this running was that Immigration would certify majors and degrees at Universities for the programme. They'd have to provide stats to maintain certification, including on graduate outcomes. So Universities would only put up those programmes where they expected good graduate placement and would exercise some caution in admission standards.

  3. This is a great idea.

    I run a tech-economy discussion group in Auckland called the Moxie Sessions. Sean Simpson from Lanzatech came along eighteen months or so ago suggesting something similar to your idea. See the writeup here:

    And I know Raf Manji is talking about similar stuff in Christchurch:

    As a long-term policy though, what I reckon would be better is a system where these types of visas were like working holiday schemes, i.e., they were reciprocal as between governments. In return for us allowing in qualified young people without too many conditions, we could open the doors to the same opportunity for young New Zealanders to go overseas. Helps to diversify New Zealand's links with the world beyond Bondi, Queensland and Shepherd's Bush: the most important places for us in the future are China, other parts of Asia, and the USA, places that we can not easily do more than visit.

    As a practical matter, we could start making these arrangements with countries where New Zealand already has an uncapped working holiday regime.