When Politics Trumps Economics: Contrasting High-Skilled Immigration Policymaking in Germany and Austria

Introduction

High-skilled immigration (HSI) policy has become of increasing importance to immigrant-receiving countries (Boeri et al. 2012; Triadafilopoulos and Smith 2013). Nearly every industrialized nation has introduced one or several visa programs through which skilled and high-skilled immigrants ¹ are supposed to migrate (Haas, Natter, and Vezzoli Forthcoming). However, success in establishing attractive and open HSI policies, which outline the admission and selection criteria as well as the work and residence rights (i.e., post-entry rights) for these immigrants, has varied considerably across countries (Lowell 2005; Cerna 2016; Kolbe and Kayran 2019). The predominant strand in labor migration policy research, and in research on HSI policy more specifically, argues that differences across states’ policies are driven by “market factors,” particularly the politics of organized labor market actors such as employer associations and unions (Cerna 2009; Facchini, Mayda, and Mishra 2011; Brucker et al. 2012; Cerna 2016), and the market-institutional context in which these actors are embedded (Devitt 2011; Menz 2011; Wright 2012a). Accordingly, we should expect similar HSI policy outputs in countries with similar “market factor” constellations.

However, this is not the case when comparing HSI policy liberalization attempts in Germany (2005) and Austria (2011), which are characterized by similar market-institutional contexts and prevalent interest group alliances in favor of HSI policy liberalization. Despite proclamations to make Germany more attractive to qualified foreign workers, the German government was not able to implement a previously strongly favored points system. ² Instead, it maintained its restrictive labor migration policy and only granted exemptions to a narrow pool of “very highly skilled” ³ applicants. Austria, by contrast, was able to implement a points system that granted flexible admission and liberal post-entry rights to a wider pool of skilled and high-skilled applicants. This discrepancy is even more puzzling given that Germany initially appeared more poised for liberalization than Austria did and had undertaken first steps toward skill-focused policies by implementing an IT Green Card in 2000 (Kolb 2003). In contrast, Austria was an unlikely candidate for liberalization, as it had moved toward more restrictive immigration regulations during the late 1990s and the early 2000s (Kraler 2011).

What explains this difference? Despite increasing recognition of the importance of “non-market” factors in HSI policy, such as organized citizen groups (Kennedy 2019), government preferences (Wright 2012b; Wright 2015), or electoral competition and national institutions (Money and Falstrom 2006; Carvalho 2014), the current literature is missing an explicit focus on the politicization of HSI and its consequences for policy liberalization. Such a focus, however, helps explain under which conditions “politics trumps economics,” particularly in countries where labor market actors enjoy traditionally strong and embedded roles in policy making.

By drawing on but also moving beyond the literature on the politicization of immigration, this article argues that despite HSI being generally a difficult policy area to politicize, it can become so if it is successfully linked to other, more contentious, immigration-related domains. Specifically, the link to immigrant integration policy is argued to create spillover effects that significantly weaken economically grounded pro-liberalization arguments and make support for HSI liberalization contingent upon addressing the issue of immigrant integration first. In contrasting the cases of policy-making in Germany’s “Immigration Act” (2005) and Austria’s “Alien Rights Reform Act” (2011), I demonstrate that politicization and issue-linkage effects can explain the relative success or failure of attempts to liberalize regulations for HSI.

In developing this argument, this article makes several contributions. First, it contributes to a growing literature that challenges the economic interest group framework in research on HSI (e.g., Money and Falstrom 2006; Wright 2012b; Carvalho 2014; Wright 2015) by providing evidence that even in cases where labor market actors are comparatively strong, immigration’s increasing political salience has weakened their influence over traditionally market-dominated policy domains, such as labor migration. Second, it provides a different explanation for why henceforth “wanted” immigration can become contentious by suggesting that the adjacent but separate policy domains of immigrant admission and immigrant integration (Hammar 1985) can affect each other. This article, thus, differs from prior studies that have tended to analyze the politics of integration and admission policy separately (Money 1999; Givens and Luedtke 2005; Duncan and Hecke 2008).

The findings presented here also have wider implications. As governments in Europe, the United States, and, more recently, Asia look to HSI programs to more actively manage and select immigrant streams, it is important to understand that while more positively viewed than other migration policy domains, HSI is not immune from migration’s growing politicization. Furthermore, the potential for substitutive relationships between immigrant admission policy and other immigration-related domains — when made politically salient — suggests more generally that these complex relationships can also shape the trajectory of contemporary immigration politics.

The remainder of this article is structured as follows. The first section outlines the predominant political economic account of variation in HSI policy and its limitations. The second section offers a theoretical perspective on the conditions under which HSI can become politicized and the implications for policy liberalization attempts. The third section offers an outline of the methodology and case study choice used in this article. In the fourth and fifth sections, I analyze the two cases and discuss the findings. Lastly, in the conclusion, the findings are summarized and the implications for the politics of HSI further explored.

The Political Economy of High-Skilled Immigration Policy

The prevailing consensus on HSI policy holds that it is shaped by labor market considerations (Wright 2015; Afonso and Devitt 2016) which are voiced by organized labor and capital (Facchini, Mayda and Mishra 2011; Brucker et al. 2012), and that eventual policy output is shaped by the political struggles between the two (Cerna 2009; Cerna 2016). In this clientelist approach, interest groups such as unions and employer associations seek to influence labor immigration policy to increase concentrated benefits for their constituents, while immigration policy’s costs are usually diffused among the public (Freeman 1995). Employer associations are generally said to prefer as few restrictions as possible on their ability to hire foreign workers and have been identified as key drivers of policy liberalization (Freeman 2006; Menz 2011; Kennedy 2019). In contrast, unions are argued to oppose liberalization, as they are concerned about wage dumping, losing control over the labor supply, and possible labor market competition for domestic workers (Penninx and Roosblad 2000, 1–20). Nonetheless, these preferences are not monolithic, and in fact, varying stances toward labor migration among unions and employers have led to the emergence of alliances between both groups to restrict or liberalize labor migration policy (Watts 2002; Cerna 2009; Afonso 2012).

More recent work has further argued that institutional differences matter. One group of authors has argued that differences in national labor market institutions and production regimes shape employer preferences for foreign labor (see Hall and Soskice 2001), suggesting that in coordinated market economies (CMEs), demand is lower and more exclusively focused on sector-specific high-skilled labor migrants, whereas in liberal market economies (LMEs), greater demand for general high- and low-skilled labor migrants exists (Devitt 2011; Menz 2011; Wright 2012a). A second group of authors has suggested that differences in policy making traditions, such as the absence or presence of neo-corporatism that formally includes organized labor and capital (i.e., unions and employers) as “social partners” in government policy making (Schmitter 1981), affect whether immigration policy is more likely to be dominated by interest group objectives or characterized by governments’ relative independence in pursuing their immigration policy ambitions (Wright 2012b; Wright 2015; Cerna 2016).

While this body of literature makes important contributions to the study of HSI policy, it does not provide a convincing answer to the empirical puzzle of policy divergence between Germany and Austria. First, both Germany and Austria are CMEs (Hall and Soskice 2001, 20–21), suggesting similar employer preferences for HSI. Second, cross-actor alliances in favor of liberalization formed in both Germany (see Menz 2011; Cerna 2016) and Austria (see Fassmann 2013a; Krings 2013). Third, both countries have neo-corporatist modes of policy making ⁴ that offer organized labor market actors significant influence over policy making (Schmitter 1981). Therefore, policy preferences, alliance formation, and policy inclusion were similar in both cases and, thus, less meaningful in explaining why Austria succeeded and why Germany failed in their respective attempts to introduce points systems and liberalize HSI policy.

The aforementioned points align with more general criticism of the prevailing political economy approach to HSI policy. For example, prior work has stressed the importance of organized citizen groups in influencing HSI policy, suggesting that apart from organized labor and capital, citizens’ collective efforts to influence immigration policy reform constitute a non-economic form of interest group politics (Kennedy 2019). By contrast, others have more directly argued to loosen “the theoretical straightjacket of interest group politics” altogether (Afonso and Devitt 2016, 606) and have explored how political parties and the sources of their policy preferences, such as political ideology and policy legacies (Wright 2012b; Wright 2015) or electoral competition and national institutions (Money and Falstrom 2006; Carvalho 2014), shape differences in HSI policy. However, these studies have predominantly focused on country cases, such as the United States, the United Kingdom, or Australia, where organized labor market actors are comparatively weaker and have fewer institutionalized channels of policy influence at their disposal (Schmitter 1981; Hall and Soskice 2001, 59). Thus, it remains unclear under what conditions political, rather than economic, factors shape HSI policy success in countries with stronger labor market actors that enjoy institutionalized mechanisms of policy consultation.

Moreover, as immigration has become a highly salient issue in European public opinion and partisan politics, a purely utilitarian focus on interest group politics alone has been difficult to maintain as policy output is no longer solely decided between employers and bureaucrats behind closed doors (Lahav and Guiraudon 2006, 213). Equally important, despite growing relevance to contemporary political debates, insights from the politicization of immigration literature about the importance of political party dynamics (e.g., Brug et al. 2015; Meyer and Rosenberger 2015; Grande, Schwarzbözl and Fatke 2018) have been largely neglected in the study of traditionally more market-dominated immigration areas, such as HSI. While most studies acknowledge some role for political parties in the policy-making process, whether the issue of immigration is publicly salient or politically contested, and whether this public perspective holds implications for political parties’ responsiveness to labor market actors’ demands, has remained largely unaddressed (e.g., Cerna 2009, Devitt 2011, Menz 2011).

However, the literature on the politicization of immigration has argued that the politicization of immigration policy significantly weakens interest-group influence over eventual policy output (Joppke 1999; Givens and Luedtke 2005). “Politicization” here is commonly understood as being simultaneously characterized by high issue salience (i.e., the issue receives a high level of public attention) and actor polarization (i.e., political actors differ markedly in their policy positions on the issue) (Brug et al. 2015; Grande, Schwarzbözl, and Fatke 2018). As long as policy issues are technical in nature and remain out of the public spotlight, interest groups such as businesses enjoy greater influence in policy making (Culpepper 2010) and political parties are likely to find consensus on appropriate legislation (Givens and Luedtke 2005). Once immigration becomes a salient issue with greater public attention, however, it moves from the closed circles of interest group politics to the public political arena, where political parties are able to mobilize the electorate to their advantage (Guiraudon 1998; Joppke 1999). This shift decreases the chances that parties will find consensus in favor of policy liberalization (Givens and Luedtke 2004; Hansen and Koehler 2005).

Thus, to better understand when and why economic actors are constrained by political concerns regarding HSI reform, we must first ask how and under what conditions HSI policy becomes politicized. As I argue further, this is not that straightforward, as high-skilled immigrants are a (comparatively) positively viewed type of immigrants. However, I show that by being linked to other, more contentious immigration policy domains, negative spill-over effects can significantly derail attempts to liberalize HSI policy. In contrast to prior work on immigration policy that has tended to view immigrant admission policies (i.e., policies that regulate the conditions of immigrant entry) and immigrant integration policies (i.e., policies that support immigrants’ social, economic, and political inclusion into their respective host society) (Hammar 1985) as connected, but largely independent policy areas (e.g., Money 1999; Givens and Luedtke 2005; Breunig and Luedtke 2008; Duncan and Hecke 2008; Alonso and Fonseca 2011), my argument delineates one way in which admission and integration policy areas may interact and effectively influence each other.

The Politicization of High-Skilled Immigration Policy

How, then, does HSI policy become politicized? As high-skilled immigrants tend to be fewer in number and to possess greater educational and language endowments, they are often argued to be less likely to be perceived as economic or cultural threats (Money and Falstrom 2006). In addition, through their projected income and occupational levels, high-skilled immigrants are more likely to be perceived as contributing via taxes and less likely to become reliant on social services (Facchini and Mayda 2012). These claims are supported by a number of recent studies that demonstrate that high-skilled immigrants are viewed much more favorably among European publics than are low-skilled immigrants (e.g., Helbling and Kriesi 2014; Naumann, Stoetzer and Pietrantuono 2018; for further evidence outside Europe, see Valentino et al. 2019). ⁵ Thus, given that high-skilled immigrants are, all things equal, more positively viewed than other types of immigrants, it is not immediately apparent how HSI policy reform becomes politically contentious.

However, as my analysis shows, HSI policy can become meaningfully politicized if it is linked to other immigration areas, especially those that are more contentious. What is considered contentious may differ across country contexts. Whereas in traditional immigration countries like the United States and Australia, other admission-related domains such as irregular migration or family reunification are viewed as politically salient (Freeman, Leal, and Onyett 2013; Wright 2013; Kennedy 2019), in reluctant and new countries of immigration, such as those in central Europe, immigrant integration policy is often seen as particularly controversial, with parties adopting strongly partisan preferences on the issue (Money 1999; Givens and Luedtke 2005; Breunig and Luedtke 2008; Duncan and Hecke 2008; Alonso and Fonseca 2011). Hence, in reluctant countries of immigration, contentious immigration areas are likely to be those that center on issues of immigrant integration.

If a linkage between HSI and another immigration domain exists, it can create significant spillover effects that impact the chances for HSI policy liberalization. The argument developed here is that once HSI is linked to an adjacent controversial policy issue, rationales shift away from purely economic assessments, either in favor of or against the issue, and toward questions about whether further immigration, even if economically or fiscally desirable, is politically acceptable. This shift, I argue, weakens the influence of economic market actors who would benefit the most from liberalization, such as employers. Furthermore, controversy surrounding connected immigration issues can engender cross-pressures between economic constituents (i.e., employers or labor unions) and electorates of political parties and thus increase concomitant electoral risks for politicians. This controversial potential can lead to either decreasing support for the HSI provisions in question (Freeman, Leal, and Onyett 2013) or conditional support, provided that restrictive policies in these adjacent immigration areas are passed in return (Wright 2013).

Such a linkage between immigrant integration and HSI is likely to occur if HSI policy is embedded in large-scale immigration reforms that place it in greater proximity to other immigration issues (Wright 2012b, 748; Kennedy 2019, 350). Moreover, it is also likely to occur if HSI constitutes a significant break with policy legacy. If the proposal suggests not merely adjusting policy settings or current instruments but instead fundamentally altering policy goals, it is likely to elicit greater opposition among powerful political actors and the public (Ellermann 2015). However, I would argue that these conditions are necessary, but not sufficient, for this linkage to occur. As I will show, such linkage must also be actively injected into the policy process by political actors. Most likely, issue linkage of this type will occur if promoted by political parties that act as issue entrepreneurs (i.e., if they bring a previously marginal issue into political focus and take a policy stance that differs markedly from those of the political mainstream) (Hobolt and Vries 2015). In the context of immigration, this role has often been attributed to either center-right parties (Bale 2008; Boswell and Hough 2008; Green-Pedersen and Odmalm 2008) or radical-right populist parties (Howard 2010; Grande, Schwarzbözl, and Fatke 2018).

In sum, then, the influence of economic interest on HSI policy reform is argued to be undermined if HSI policy becomes politicized through issue linkage. This politicization, in turn, has potential consequences for policy liberalization. First, the politicization of HSI policy is argued to occur if it is linked to another, contentious immigration area. In the case of reluctant countries of immigration such as Germany and Austria, this area is likely to be immigrant integration policy. Through spillover effects, HSI policy becomes controversial by being caught in the crosshairs of political struggle over immigrant integration. In contrast, in the absence of proximity to immigrant integration policy or other contentious issues at the time, spillover effects should be minimal and exert little effect on HSI policy. Second, as long as HSI reform is not politicized, policy making is dominated by economic interest groups and greater chances for parliamentary party consensus exist. This non-politicization makes eventual policy liberalization more likely. Conversely, when HSI reform becomes politicized, the circle of policy actors widens beyond economic interest groups and the polarization among political parties decreases the chances to agree on reform, making HSI policy liberalization less likely. In the remainder of this article, I outline the methodology used here and analyze the case of Germany’s 2005 Immigration Act and Austria’s 2011 Alien Rights Reform Act to test these hypotheses.

Methodology

This article employs a structured, focused comparison (i.e., a systematic comparison of variation in key explanatory variables and outcomes across two detailed qualitative case studies; see George and Bennett 2005) of Germany’s 2002–2004 policy reform (“Immigration Act” 2005) and Austria’s 2009–2010 policy reform (“Alien Rights Reform” 2011). These two countries, and in particular these two policy-making episodes, lend themselves well to comparison within a most-similar-systems design, given their similar citizenship configurations, immigration experiences, and overall demand-driven approach to labor immigration. ⁶ Moreover, in both cases, the interest group system is neo-corporatist, and employers favored more skilled immigrations and HSI, while unions were more ambiguous in their positions but eventually conceded.

While the German case has already received some academic scrutiny, prior work has focused predominantly on the importance of economic demands and client politics (Cerna 2016), internal political party dynamics (Boswell and Hough 2008), or the impact of policy legacies (Schönwälder 2013) and has offered less attention to how issue linkages have affected the policy debate. Further, by contrasting the German case with the comparatively less studied Austrian case, the comparison made here allows us to systematically test whether the argued conditions indeed explain the success or failure of HSI liberalization attempts. In addition, to generalize the observed patterns beyond these two episodes, I place both policy reforms within a temporal context.

To test the proposed relationships, I conducted 21 in-depth interviews between May and June 2014 in Germany and Austria with politicians, administrative personnel and policy experts, and interest group representatives. I recruited participants for semi-structured interviews through a non-random sampling method, selecting suitable participants from public records and, while on-site, through snowball sampling for additional interviewees. The information obtained from these interviews provided insights into relevant actors’ motivations, as well as the political dynamics of the decision-making process. Evidence from interviews was further triangulated through the analysis of public statements, reports, and parliamentary debates and through meta-analysis of the secondary literature to provide a comprehensive picture of the two policy reforms.

Key concepts were operationalized as follows. First, to be deemed politicized, the policy issue must be publicly salient, and political parties must significantly diverge on the policy solution (Brug et al. 2015; Grande, Schwarzbözl, and Fatke 2018). In contrast, an issue was not deemed politicized if there was sufficient consensus on how to address the issue among the main political actors and, thus, party polarization was not present or, conversely, if actors may have differed in their policy positions but the issue at hand was not publicly salient (Brug et al. 2015, 5–7). Further, a linkage to contentious immigrant integration policy existed if, first, HSI policy was directly and repeatedly connected to or conflated with issues of immigrant integration and, second, if immigrant integration was regarded as contentious. Lastly, following prior work on HSI policy (Lowell 2005; Cerna 2016), policy liberalization was assessed by drawing upon data on the number of changes in specific policy provisions for HSI, including conditions of entry (such as the presence of labor market tests and the length and renewability of permits) and post-entry rights (such as employer portability, spousal employment, and access to permanent residence). The next two sections present evidence for key arguments and concepts that explain why policy reform failed in the case of Immigration Act and succeeded in the case of Alien Rights Reform Act.

Germany’s Immigration Act (2005): One Step Forward, Two Steps Back

Historically, labor migration to Germany has been regulated via labor market demand, as the infamous guest worker system of the 1950s and the 1960s illustrates (Borkert and Bosswick 2011, 96). Even after the official end of foreign labor recruitment in 1973, several legal exemption ordinances, such as the Anwerbestoppausnahmeverordnung (ordinance on exemptions from the recruitment ban) from 1990 continued actual labor migration to Germany in the form of contract-bound and seasonal workers (Ellermann 2015). Despite exemption regulations, until the end of the twentieth century, Germany had no comprehensive immigration legislation.

In the late 1990s and early 2000s, however, the incumbent government coalition of the social-democratic SPD (Sozialdemokratische Partei Deutschlands) and Green Party introduced several policy innovations, such as the IT Green Card (2000), to attract skilled foreign IT personnel and reformed German nationality law (2001) to provide greater legal integration of resident foreigners (Borkert and Bosswick 2011). Spurred by this “reform climate,” the coalition also tasked an independent “commission on immigration,” led by chief officer Rita Süssmuth, with proposing avenues to reform German immigration policy more generally (Boswell and Hough 2008; Schönwälder 2013). Composed of politicians from all parties, various social actors, and labor market interest groups, the commission suggested, in its widely publicized 2001 final report, Zuwanderung gestalten, Integration fördern (Structuring Migration, Fostering Integration; see Süssmuth 2001), to employ a Canadian-style points system to regulate labor migration. This system would have allowed especially qualified foreign workers to immigrate without a job offer in hand and, thus, would have departed significantly from the previously exclusively demand-led system (Süssmuth 2001; Schönwälder 2013;). In particular, the commission report argued that high-skilled labor immigration was essential to combat the consequences of demographic change in Germany, to minimize the economic impact of present and anticipated labor shortages, and to ensure Germany’s competitive edge in the global economy (Süssmuth 2001).

Importantly, the proposal was supported by both employers and unions (Cerna 2016, 115–16). Employer organizations such as the Federation of German Industries (BDI, Bundesverband der Deutschen Industrie), Confederation of German Employers’ Associations (BDA, Bundesvereinigung der Deutschen Arbeitgeberverbände), and Chamber of Commerce and Industry (IHK, Industrie- und Handelskammer) argued that liberalization was necessary to fill labor market shortages and to remain internationally competitive (interview, BDA official; Menz 2013) and launched a significant public relations campaign to increase public support for liberalization efforts (Menz 2011). Unions, represented by the German Trade Union Confederation (DGB, Deutscher Gewerkschaftsbund), were initially skeptical, but eventually agreed to a points system, provided it included clear, definable criteria and protected domestic workers (interview, DGB official; Cerna 2016, 115–16).

Despite interest group support for the legislative draft based on the commission’s 2001 recommendation, the points-system proposal became politicized. While the SPD, Greens, and the market-liberal FDP (Freie Demokratische Partei) welcomed the proposal, the conservative CDU (Christlich Demokratische Union Deutschlands) and CSU (Christlich-Soziale Union) parties strongly opposed it (Borkert and Bosswick 2011, 102). The sister parties CDU and CSU argued that the policy draft would lead to more immigration to Germany and threaten German employees, and, thus, they rejected the idea of the demographic necessity for labor migration, instead arguing that Germany already possessed sufficient regulatory instruments to facilitate HSI (Bundestag 2001; Schönwälder 2013, 281–82). This opposition, however, was strategic. The issue of immigration had gained a strong salience among the German public during the 1999 state election campaigns, in which the CDU had strongly opposed the dual citizenship proposition in the nationality law reform, and had ultimately proven to be a successful issue to mobilize voters (interview, think tank policy expert; Boswell and Hough 2008). In vehemently challenging the 2001 immigration reform proposal by pointing out the dangers of admitting more immigrants, given the presumably lacking integration of those already resident, and by invoking fears of a return to large-scale foreign-worker recruitment similar to that of the post-war period, the CDU/CSU contributed to the increasing public salience of immigration reform during the early 2000s (Boswell and Hough 2008). ⁷

The proposal’s politicization centered specifically on the points system for qualified immigrants, which broke with existing policy legacy of limited and exclusively demand-led immigration and, thus, evoked intimately connected issues of immigrant integration (Schönwälder 2013). In suggesting an active and permanent immigration channel, the proposed points system symbolized a turn toward Germany becoming a classic country of immigration (Einwanderungsland) — a particularly difficult and contentious notion among the German public and political elites, who had until recently insisted that Germany was not a country of immigration (interviews, think tank and research institute policy experts; Bauder 2013). The ensuing debate over the points system became an expression of the political process of coming to terms with Germany’s immigration reality (interviews, think tank and research institute policy experts). Specifically, it activated long-smoldering concerns about immigration and its impact on Germany, providing fertile ground for a wider public debate about immigrant integration (Bauder 2013; Schönwälder 2013). This was so, not least because the German government had long eschewed an active immigrant integration policy even as issues of immigrant integration started to gain greater public salience throughout the 1990s and early 2000s (Heckmann 2003).

In this way, the proposed break from existing policy offered an opportunity to politicize the reform and was actively seized by the CDU/CSU, which injected the issue of immigrant integration into policy debates over the immigration law. Suggesting that Germany possessed a limited capacity to accept any more newcomers, CDU/CSU politicians, such as Michael Glos, asserted that the government should first focus on integrating those immigrants already residing in Germany (Bundestag 2001, 22032). This approach constructed a narrative of trade-off: Liberalizing immigration law, even if only for HSI, entailed first dealing with immigrant integration. A content analysis of the parliamentary debate over the new immigration reform supports this view. ⁸ Among a total of 21 speeches made by Bundestag politicians, the proposal was opposed on the grounds of immigrant integration concerns twelve times, ⁹ most often by CDU and CSU politicians. Furthermore, it was asserted three times that only exceptionally highly skilled migrants should be allowed and four times that, despite exceptions, a general increase in labor migration was not acceptable.

This issue linkage had two effects. First, it replaced arguments for the liberalization of immigration law on economic grounds with arguments against liberalization on integration grounds. Further immigration, it was argued, should not be pursued unless, first, the integration of already-residing immigrants would be sufficiently fostered (Bundestag 2001, 22032; Boswell and Hough 2008, 341). In the process, the issue linkage also cemented the argument that economic demand for foreign labor had to be balanced against preventing Germany from becoming a major “country of immigration” (interviews, think tank expert, DGB official and commission member), something that was associated with the fear of losing Germany’s sense of national identity (Bauder 2013). Despite active engagement in the policy process, pro-liberalization employer associations were not able to effectively counter the debate’s political framing as a question of immigrant integration, rather than market priorities (Schönwälder 2013, 283).

Second, the issue linkage relegated policy provisions for HSI to the background. Policy content had shifted to furthering immigrant integration through mechanisms such as reforming the residence permit system and introducing integration measures like mandatory integration and language classes for foreign residents (Borkert and Bosswick 2011, 103). As one member of the expert commission put it, “The reform eventually included, first and foremost, integration measures for those already residing here [in Germany]; in the second place, it upheld the general immigration stoppage; and exemptions for specific migrant types, such as highly skilled ones, came only in the third place” (interview, commission member). This assessment confirms that although the proposal began with the goal of facilitating HSI, that goal was ultimately crowded out by the focus on fostering immigrant integration, effectively relegating admission regulations for skilled workers to the margins.

The bitter fight over the new immigration law’s content ended in early 2002 with a narrow majority supporting the law in a highly divided Bundesrat — the German parliament’s upper chamber. The law, however, was immediately challenged on procedural grounds by the conservative opposition and eventually revoked by the Constitutional Court (Cerna 2016, 118). By the time the draft was resubmitted for consideration in 2004, the upper chamber’s composition had changed in favor of the conservatives, allowing them to block and renegotiate the proposal after the election. The CDU made clear that the maintenance of immigration stoppage and the removal of the points system were non-negotiable in exchange for their political support (Schönwälder 2013, 281). This declaration led to the eventual abandoning of the points system and replacement with specific exemptions, before the law finally passed in 2004 (Borkert and Bosswick 2011, 102–03).

The resulting policy output fell far below what was initially proposed. While exceptions for high-skilled immigrants were made in §18 and §19 of the Residence Act — a subset of the new Immigration Act — they remained restrictive in nature. The track for “highly skilled” foreign workers (§19 of the Residence Act) was reserved for a narrow pool of exceptional academics and researchers, granting them and their spouses immediate work and long-term settlement permits, and required a steep average salary of 85,000 EUR. “Conventional” high-skilled foreign workers such as managers or scientific personnel for research and development received, under §18, only temporary, limited work and residence titles, with both themselves and their spouses being subject to labor market tests and potential mandatory integration classes (interview, advisory body policy expert; Heß 2009). Permanent residence for high-skilled immigrants was possible after five years, if they could demonstrate sufficient income, German proficiency, and social insurance contributions (Cerna 2016, 119). Thus, while the 2005 Immigration Act was supposed to regularize immigration and attract skilled and high-skilled immigrants, it did not succeed in liberalization and instead only further limited and regulated labor mobility (Schönwälder 2013).

Other liberalization attempts of HSI policy in Germany were more successful because they took place in narrow, targeted reforms and, thus, decreased the opportunities to politicize or link them to issues of immigrant integration. In 2000, for example, the German government introduced the IT Green Card, which aimed to attract applicants with tertiary degrees in computer science or job offers with annual salaries of over 51,000 EUR (Cerna 2016, 114). This card allowed holders to stay in Germany for up to five years and to bring their spouses (OECD 2013b, 70). This policy was introduced in response to lobbying by high-tech employer associations, notably by BITKOM (Bundesverband Informationswirtschaft, Telekommunikation und neue Medien), which argued that the sector was experiencing significant labor shortages (Schönwälder 2013; Cerna 2016, 111). Although initially skeptical, unions eventually supported the proposal (Cerna 2016, 110–14). While a first step toward HSI liberalization, the proposal nevertheless suggested only a narrow, sector-specific work visa that left the predominant “zero-immigration” paradigm intact (Ellermann 2015). In addition, the IT Green Card proposal was unilaterally announced by Chancellor Schroeder at the CeBit computer expo in March 2000, surprising politicians and the public alike (Borkert and Bosswick 2011, 110; Cerna 2016, 110–14). Both factors — the targeted nature of the proposal and the swiftness of the process — left little space to politicize the issue or link it to other immigration concerns. Despite attempts by the CDU, such as their now infamous “Kinder statt Inder” campaign (“Children instead of Indians”) that argued that instead of recruiting IT workers from countries such as India, Germany should invest in the technical training of their youth, the policy did not become successfully politicized (Triadafilopoulos and Zaslove 2006, 187).

Moreover, a number of targeted and narrow liberalizations between 2007 and 2012, focusing on the adjustment of existing policy instruments, demonstrated a similar pattern. For example, after complaints by employers and unions over the high salary threshold of 85,000 EUR for high-skilled labor immigrants, the 2009 Labor Migration Control Act lowered it to 63,000 EUR (Cerna 2016, 120–21). Further, in 2012, the Residence Act was amended after the government presented plans to counter labor market shortages, including liberalizations for skilled and high-skilled workers (BMAS 2011). Jointly supported by unions and employers, the amendment removed labor market tests for certain shortage occupations, dropped the salary-based requirements under Paragraph §19, and implemented a conditional job search visa (Cerna 2016, 123–24; OECD 2013a, 254). Notably, these liberalizations were adjustments to existing instruments, which drew comparatively little public attention and had no significant overlap with other immigration policy areas. Taken together, these episodes demonstrate that liberalization attempts were successful so long as reform proposals remained relatively technical and targeted in nature and focused on adjusting already-existing policy instruments, thus not lending themselves to politicization or issue linkage.

Austria’s Alien Rights Reform Act (2011): Shifting Gears, In Moderation

As in the case of Germany, labor migration to Austria has traditionally been regulated through labor market mechanisms (Fassmann 2013b). Beginning in 1994, Austria regulated immigration via a strict quota system that allocated a fixed number of annually available permits per migrant stream, including family-based residence permits (interview, research institute policy expert; Kraler 2011). Starting in the mid-2000s, however, the Austrian government became increasingly dissatisfied with the existing quota system, which had become less effective in regulating migrant numbers (Kraler 2011, 42–43). This dissatisfaction was also driven by increasing employer complaints. In particular, employer associations like the Chamber of Business (WKÖ, Wirtschaftskammer Österreich) and Federation of Austrian Industry (IV, Industriellenvereinigung) argued that the existing quota system could not meet growing labor shortages (interviews, WKÖ and IV officials; Fassmann 2013a). In addition, they expressed disappointment with the EU Blue Card’s ¹⁰ restrictive provisions, which they had hoped would open more liberal pathways, especially for skilled and high-skilled labor immigration (interviews, WKÖ and IV officials; Fassmann 2013a).

In 2008, the aforementioned employer associations began to push more actively for a liberalization of Austrian labor immigration by launching several media campaigns to advocate for new regulations and by developing a first concrete policy proposal (Fassmann 2013a). In a joint position paper with the International Organization for Migration (IOM), the social partners ¹¹ argued that impending demographic changes and future labor market shortages necessitated a wholesale labor migration reform in Austria, centered around a points-based system, as in Canada (IV, IOM and WKÖ 2008). Specifically, such a system, it was argued, would enhance Austria’s international competitiveness by granting high-skilled immigrants and their spouses unrestricted labor market access and other rights not permitted by the quota system (IV, IOM and WKÖ 2008; Kraler 2011).

After the 2008 Austrian parliamentary elections, the employer associations urged the incoming governing coalition of the social-democratic SPÖ (Sozialdemokratische Partei Österreichs) and center-conservative ÖVP (Österreichische Volkspartei) to commit to new immigration reform (Fassmann 2013a; Krings 2013). The government consequently tasked the employer organizations, along with major labor groups like the Trade Union Federation (ÖGB, Österreichische Gewerkschaftsbund) and the Austrian Federal Chamber of Labor (BAK, Bundesarbeitskammer), to develop a concrete proposal (interview, WKÖ official; Fassmann 2013a). While the labor unions were initially skeptical of the proposal, citing fears of wage competition and a potential strain on social systems, ¹² they agreed to reform under the condition that additional domestic worker protection regulations be implemented to avoid wage dumping (interviews, WKÖ and IV officials, think tank policy expert; Krings 2013).

The proposed points system, entitled the Red-White-Red (RWR) Card, envisioned three quota-free tiers: skilled workers in shortage occupations with job offers in hand, high-skilled workers without job offers, and “key workers” who had passed a labor market test, providing clear and fast transitions from temporary to more permanent residence permits for applicants (Sozialpartner 2010). Furthermore, the proposal implied replacing the annual quotas on family reunification and long wait period for spouses, as it explicitly recognized that regulations providing fast family reunification and spousal labor market access would affect highly skilled immigrants’ migration decisions (Sozialpartner 2010, 6).

The social partners’ proposal was taken up and turned into a legislative draft by the governing parties in 2010 (Fassmann 2013a). In contrast to the German proposal of a points system, however, the Austrian draft was far less politicized, despite a moderate level of issue salience. Austria’s largest parties, the social-democratic SPÖ, and the conservative ÖVP were generally committed to immigration reform, although with different ideas about its eventual form (interviews, Ministry of Interior and Ministry of Labor and Social Affairs officials; Fassmann 2013a). The ÖVP saw itself as close to business and, thus, sympathetic to calls for fewer regulatory restrictions for companies, while the SPÖ emphasized the need for defined criteria to avoid mass immigration and wage competition (interview, Ministry of Interior official). While not opposed to the points system or high-skilled migration itself, the opposition parties, especially the right-wing, anti-immigrant FPÖ (Freiheitliche Partei Österreichs) and the national-conservative BZÖ (Bündnis Zukunft Österreich), demanded greater restrictiveness in the eligibility criteria. The Green Party, in contrast, argued for even more progressive provisions, particularly for spouses (interviews, Ministry of Interior and Ministry of Labor and Social Affairs officials; Fassmann 2013a).

In this way, parties essentially agreed that a points system should be pursued in Austria but disagreed on the details, indicating only a low degree of actor polarization (Brug et al. 2015, 5–7). As one interviewee noted, “most of the conflict over the law took place among the social partners, not among the parties” (interview, Ministry of Interior official). Further, despite immigration’s increasing issue salience over the course of the previous decade (Meyer and Rosenberger 2015b), the proposal initially received comparatively little public attention, as key debates took place below the public political radar (interview, research institute policy expert; Fassmann 2013a).

Notably, the lack of politicization of the suggested Austrian points system was shaped by two factors: first, the proposal continued, to a certain degree, existing policy practices, and second, it was difficult to connect with issues of immigrant integration. First, the proposed points system continued previous Austrian policy of demand-driven migration by requiring a job offer under most tiers, except for highly skilled immigrants, as part of the eligibility criteria (interviews, research institute expert and Ministry of Interior official). This approach diverged from other points systems, such as that in Canada, where a job offer is a bonus, not a requirement, to qualify for immigration (Parsons et al. 2014). Furthermore, some interviewees argued that the proposal constituted a logical continuation of the old quota system, which already included discrete migration channels, and merely emphasized qualifications over raw numbers (interviews, Ministry of Labor and Social Affairs official and research institute expert). The proposal’s relative path dependence, thus, decreased the extent to which it could be conceived as diverging significantly from the existing immigration paradigm.

Nonetheless, the introduction of a points system did serve a similar symbolic signaling function in Austria as it did in Germany and bore the potential to trigger public fears that Austria would invite even more immigrants (interview, advisory body policy expert). To avoid backlash and critical scrutiny from a largely anti-immigrant public, the governing parties purposefully delegated policy work to the social partners, who negotiated largely behind closed doors (Krings 2013, 271) and conducted the policy process in only five months (Kraler 2011, 42–43). The proposal’s potential to trigger public opposition was also not lost on employers (interviews, WKÖ official and think tank policy expert), who took care to communicate migration’s extraordinary economic and demographic added value (see IV, IOM and WKÖ 2008). Although most labor shortages were concentrated in manufacturing and the service industry (interviews, IV official and think tank policy expert), the employer associations consciously framed the public justification for the new immigration system around high-skilled migration, which was expected to elicit less public opposition (interviews, WKÖ official, think tank and research institute policy experts).

A second reason the suggested Austrian points system was not politicized was that the decreased chance to elicit public opposition made it harder for opposing actors to meaningfully link the points system to issues of immigrant integration, despite being bundled along with regulations on integration and asylum in the Alien Rights Reform Act. On the one hand, issue linkage was difficult, as immigrant integration policy reform had preceded immigration reform in Austria. Under the previous right-wing ÖVP-FPÖ coalition government (2000–2007), Austria had passed new integration regulations referred to as Integrationsvereinbarung (Integration agreement) (Kraler 2011, 47–49). This policy instituted mandatory German language proficiency for applicants seeking to join their spouses already living in Austria, as well as mandatory integration classes for newcomers (ibid). In addition, the Alien Rights Reform Act of 2011 affirmed the importance of German language proficiency by including and streamlining these requirements alongside the RWR Card (Nationalrat 2011b). This development minimized immigrant integration’s relevance as an immediate hot-button topic that would offer an opportunity to politicize.

On the other hand, the radical right-wing opposition parties FPÖ and BZÖ did attempt to establish an issue linkage between immigrant integration and the points system, but only to a limited extent. A content analysis of the 16 speeches delivered during the parliamentary debate reveals that the predominant criticism offered by FPÖ and BZÖ centered on the argument that gaining points to qualify for some tiers was too easy and open to scams (raised three times) and that the proposed waiving of mandatory language skills for high-skilled applicants and their spouses would undermine integration policy (raised four times) (Nationalrat 2011b). To a certain extent, this linkage created negative spillover effects. As one interviewee highlighted, “the issue of required German language knowledge for spouses applying for family reunification was viewed very negatively. And in the wake of this the RWR Card was also negatively viewed” (interview, WKÖ official). Nonetheless, both employer associations and government politicians countered that generous admission and post-entry rights for applicants and spouses were crucial to making the card attractive for prospective high-skilled foreign workers (IV, IOM and WKÖ 2008; Kraler 2011; Nationalrat 2011a).

The resulting policy output — the Alien Rights Reform Act in 2011 — included the proposed RWR Card points system and outlined several different tiers for high-skilled workers, qualified workers in shortage occupations (regulated via a shortage list), and other “key workers” who had passed a labor market test and held a job offer with a minimum salary of 1.5 times the national average (Fassmann 2013a; Krings 2013). In addition, for highly qualified immigrants, a job search visa for over 6 months was included. Workers entering under the RWR Card scheme were exempt from mandatory language skills and could apply for an unrestricted work permit not tied to a specific employer (called the RWR⁺ Card) after only 12 months, entitling them after 5 years to permanent residence. Notably, previous quotas and three-year waiting periods for family reunification were removed, and spouses were granted immediate work permits. However, except for high-skilled applicants, spouses had to have demonstrated basic German knowledge prior to migrating (interview, Ministry for Europe, Integration and Foreign Affairs official; Kraler 2011, 43; Krings 2013, 271). Notwithstanding the points system’s mostly demand-driven character, the Austrian case demonstrates a considerable liberalization of key admission and post-entry rights regulations.

While labor market actors in Austria appear to have been in a stronger position to influence HSI policy than in Germany, their inclusion in the policy process marked a discontinuity, rather than continuity, with past immigration politics. Since the 1980s, an increasing process of “parliamentarization” of migration policy had taken place in Austria, marginalizing the social partners’ influence in labor migration policy (Kraler 2011, 52). Unions’ waning policy influence in particular is evidenced by the 1994 labor migration law that established the quota regulation but reflected very few labor union demands (Kraler 2011, 32). This process of parliamentarization was further accelerated by the FPÖ’s rise in 1992 (and later government participation) and their successful mobilization of public discontent over immigration and immigrant integration. Making immigration a key election issue in the late 1990s, the FPÖ pressured mainstream parties to advance immigration policy more actively and, thus, shifted the locus of immigration policy decision-making further away from the social partners to the arena of parliamentary political contestation (Kraler 2011, 30–31; Krings 2013, 264; Meyer and Rosenberger 2015, 33, 48).

Interest groups’ increasing marginalization also enabled the right-wing ÖVP–FPÖ government to eliminate low- and semi-skilled worker channels altogether in 2002 and to expand seasonal and short-term employment — against unions’ explicit opposition (Triadafilopoulos and Zaslove 2006, 177; Kraler 2011, 36–38). The formal policy inclusion of unions and employers was only re-instated after the SPÖ entered government again as part of the Grand Coalition with the ÖVP in 2008 (Krings 2013, 264, 269). This series of events suggests that even in countries with neo-corporatist policy-making tradition, interest group influence can be substantially curtailed by immigration’s politicization.

Discussion

The two case studies presented here demonstrate that HSI policy reform was shaped by different dynamics. Whereas in Germany, the points system became the lynchpin of contention among political parties, in Austria, political parties disagreed more on the details of a points system than on the need for such immigration reform itself. This absence of politicization in Austria enabled a greater influence of economic interests in policy making, whereas the presence of politicization in Germany critically weakened interest groups’ pro-liberalization efforts. Importantly, the case studies reveal that politicization depended on the success of linking HSI policy to adjacent, contentious immigrant integration issues. This issue linkage was shaped by policy legacies, the timing of integration policy, and the strength of issue entrepreneurs (i.e., political actors that strategically mobilize issues of immigrant integration).

The proposed points system broke more radically with policy tradition in Germany than in Austria and, thus, it opened up wider debates about the role of immigration and issues connected with it. Moreover, immigrant integration was a lingering and salient hot-button issue in Germany, whereas in Austria, immigrant integration, although equally salient, was no longer an urgent issue, as it had been addressed under the preceding government. Lastly, in both instances, issue entrepreneurs in the form of right-wing opposition parties emerged and actively injected issues of immigrant integration into debates on HSI policy. While in Germany, the CDU, as the largest opposition party, was able to severely weaken pro-liberalization arguments resting on economic benefits, in Austria, the FPÖ arguments mobilized integration concerns only to a limited extent and did not call into question the economic benefit narrative supporting policy liberalization. Thus, in Germany, the issue linkage of HSI reform to immigrant integration was strong, while in Austria it was weak.

Taken together, the results of this comparative analysis suggest that successful issue linkage to contentious policy issues is a sufficient, but not necessary, condition for the politicization of HSI. Politicization of HSI policy itself, however, is a necessary, but not sufficient, condition for HSI reform to fail, as successful liberalization of immigration policy also requires party control over strategic veto points (i.e., institutional decision-making stages where a specific share of party votes is needed to pass legislation) such as holding a majority of seats in the upper legislative chamber (Abou-Chadi 2016). Such party control over strategic veto points was also the case in Austria, where in 2010 the Grand Coalition dominated both lower and upper chambers, leaving smaller opposition parties such as the FPÖ and BZÖ considerably less power. However, it was not the case in Germany, where the CDU/CSU held control over the upper chamber and was able to veto the points system proposed by SPD and Greens.

Conclusion

Under what conditions do political interests undermine economic interests in high-skilled labor migration policy? The cases of Germany and Austria demonstrate that HSI policy liberalization was possible where the reform proposal was not successfully politicized by linking it to another contentious immigration policy area. In Germany, the connection of immigrant integration policy to immigrant admission policy proved to have negative repercussions for efforts to liberalize regulations for high-skilled immigrants and significantly weakened labor market actors’ influence. In contrast, in Austria, admission policy reform could not be successfully linked to issues of immigrant integration policy, thereby enabling a greater influence of economic interests in policy making. While this article focused only on cases in which labor market actors were in favor of liberalization, the study by Berg and Spehar (2013) suggests that political parties can find common ground for policy liberalization in cases where labor market actors are jointly opposed to liberalization.

This article’s findings contribute to an ongoing debate in the high-skilled migration policy literature that challenges the dominant economic interest group politics framework (Money and Falstrom 2006; Carvalho 2014; Wright 2015; Kennedy 2019). On the one hand, the findings demonstrate that even in countries with stronger interest group systems, HSI liberalization attempts can fall short of their stated aims if the politicization of HSI induces centrifugal political dynamics that weaken the relative influence of labor market actors. On the other hand, the findings also suggest that variation in HSI policy appears to be importantly shaped by how arguments for and against liberalization can traverse and connect to other immigration policy domains.

This article also helps illuminate how the domains of immigrant admission and integration may relate to each other. While the politics of immigration literature has argued that immigrant admission and integration policy differ in their partisan logic (Hammar 1985; Money 1999; Givens and Luedtke 2005; Duncan and Hecke 2008), we know little about if and how these two domains interact or shape each other. While these potentially more complex relationships require further academic attention, the findings here suggest that issue linkages between different policy areas can be constructed but require active political entrepreneurship. Once established, however, issue linkages can lead to substitutive relationships rather than complementary ones.

Finally, this article has wider implications. While governments may set out to attract the “best and the brightest” immigrants and to manage migration more actively, the trajectory of HSI policy depends on whether political elites are able to separate it credibly from other issues connected to immigration or, as Wright (2013) suggests, to convincingly signal restrictions in adjacent policy areas. However, difficulties in striking a balance between different domains of immigration policy and concomitant domestic tensions are not only prevalent among Western states but also increasingly visible in new countries of immigration in Asia, such as China (Ding and Koslowski 2017). The degree to which HSI policy becomes meaningfully liberalized or follows a restrictive trajectory depends not only on economic demand and labor market politics but also more and more on how the wider field of immigration policy is handled. Thus, the fate of current debates over proactive HSI policy and the introduction of points systems in Germany, but also in the United Kingdom and the United States (as of 2020), will be increasingly shaped by the politicization of immigration writ large.

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