TAILIEUCHUNG - Lecture Labour market economics: Chapter 11 - Dwayne Benjamin, Morley Gunderson, Craig Riddell

Chapter 11 - The economics of immigration. The following will be discussed in this chapter: Patterns of immigration, “Points System”, impact on native-born, assimilation, drain on public treasury? | Chapter Eleven The Economics of Immigration Created by: Erica Morrill, Fanshawe College © 2002 McGraw-Hill Ryerson Ltd. Chapter Focus Patterns of immigration “Points System” Impact on native-born Assimilation Drain on public treasury? Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Profile of Immigration to Canada Until the mid-1980s overall immigration levels fluctuated considerably 200,000 immigrants per year Per-capita immigration levels are slightly lower Source regions have changed dramatically Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. The Policy Environment Two “levers” number of immigrants who is admitted What are the policymakers are trying to achieve? Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Immigration Policy Assume policy makers are attempting to maximize “national welfare” admitting immigrants to alleviate specific skill shortages or contributing to economic growth family reunification sanctuary from political persecution Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Two Classes Assessed evaluated on the basis of their likely contribution and success in Canadian labour market Nonassessed family and refugee classes Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. The Impact of Immigration on Employment and Wages D0 S0 N N0 W0 W S1 N1 W1 Impact on Supply Only D0 S0 N N0 W0, W Impact on Supply and Demand S1 N1 W1 D1 Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Effects of Immigration Positive Effects Fill markets where there is already a disequilibrium Increase derived demand Alter trade patterns Invest Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Economic Assimilation Assimilate in terms of hours working Starting out at a lower level than an native born individual Expect wages to increase over time Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Economic Assimilation Profile Initially the immigrant may suffer an earning penalty (entry effect) As the immigrant ages earnings in this country should also rise If assimilation is quick disparity offset by a short catch-up period Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Figure Hypothetical Assimilation Profile Immigration Native-born Earnings 20 (YSM=0) T Age 65 (YSM=45) Entry effect Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Immigrant Outcomes and Public Policy Canadian Point System vs. . Family Reunification point system reduces admissions from less developed countries has an impact on tilting immigrant selection towards more skilled groups independent immigrants fare better than family class and refugee immigrants Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. Impact of Immigration on Source Countries Brain Drain Less-developed countries may lose their most skilled labour to more-developed countries Home countries bear the cost of education and skilled emigrant reaps the benefits Possible remedies Chapter 11- © 2002 McGraw-Hill Ryerson Ltd. End of Chapter Eleven Chapter 11- © 2002 McGraw-Hill Ryerson Ltd.

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