What is the Value of U.S. Citizenship?

Last Updated Nov 20, 2009 11:12 AM EST

More than 7 million legal residents who are eligible to become U.S. citizens each year, essentially green-card holders, choose against doing so.

They decide for whatever reason that the benefits of citizenship (voting rights, potential for government employment, ability to bring their families here) are not worth the costs, starting with the $675 application fee. If you are an expert in marketing, as is Harvard Business School's John Quelch, this fact presents a unique opportunity to view the issue through the lens of pricing strategy in the public sector.

This is a timely issue because immigration officials are thinking of raising application prices for citizenship from the current $675. The last time prices increased, in 2007, applications dropped 50 percent.

Let's consider citizenship a U.S. product offered in competition with other countries. This country, made strong by immigrants-become-citizens, has an interest in attracting bright and hard working people to our shores. But 90 percent of our 8 million target customers annually aren't buying the product. A business facing this same issue of underwhelming demand would consider a range of options to boost sales including price cuts (the idea of a price increase would be laughable), better marketing of benefits, promotions, loans, and, in the case of educational products, scholarships.

What should the U.S. do?

"Should the rest of us care?," Quelch asks on his Harvard Business Publishing blog. "Should we, as a nation of immigrants, subsidize the cost of processing applications in an economic recession to motivate more qualified but resource-strapped residents to apply? Would our democracy benefit if more legal residents joined the ranks of voters, became fully engaged in community life, and put down stronger roots? How can we quantify these benefits to justify a price below cost? Or should we leave the price as is but market the benefits of citizenship more effectively?"
If you were decision makers in the government, how would you work through this pricing strategy issue?

(Image by Sean Silverthorne)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.