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, M.Ed           Fanshawe College © 2002 McGraw-Hill Ryerson Ltd Chapter 11-1 Chapter Focus  Patterns of immigration  “Points System”  Impact on native-born  Assimilation  Drain on public treasury? © 2002 McGraw­Hill Ryerson Ltd Chapter 11­2 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 © 2002 McGraw­Hill Ryerson Ltd Chapter 11­3 The Policy Environment  Two “levers”  number of immigrants  who is admitted  What are the policymakers are trying to achieve? © 2002 McGraw­Hill Ryerson Ltd Chapter 11­4 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 © 2002 McGraw­Hill Ryerson Ltd Chapter 11­5 Two Classes Assessed Nonassessed  evaluated on the  family and refugee basis of their likely classes contribution and success in Canadian labour market © 2002 McGraw­Hill Ryerson Ltd Chapter 11­6 The Impact of Immigration on Employment and Wages Impact on Supply Only S0 W S1 W0 Impact on Supply and Demand S0 W S1 W0,W W 1 D0 N0 N N D0 N0 D1 N1 N © 2002 McGraw­Hill Ryerson Ltd Chapter 11­7 Effects of Immigration  Positive Effects  Fill markets where there is already a disequilibrium  Increase derived demand  Alter trade patterns  Invest © 2002 McGraw­Hill Ryerson Ltd Chapter 11­8 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 © 2002 McGraw­Hill Ryerson Ltd Chapter 11­9 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 McGraw­Hill Ryerson Ltd 10 Hypothetical Assimilation Profile Figure 11.5 Earnings Immigration Entry effect Native-born 20 (YSM=0) Age 65 (YSM=45) Chapter 11­ © 2002 McGraw­Hill Ryerson Ltd 11 T Immigrant Outcomes and Public Policy  Canadian Point System vs U.S 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 McGraw­Hill Ryerson Ltd 12 Impact of Immigration on Source Countries Brain Drain  Less-developed countries may lose their most skilled labour to moredeveloped countries  Home countries bear the cost of education and skilled emigrant reaps the benefits  Possible remedies Chapter 11­ © 2002 McGraw­Hill Ryerson Ltd 13 End of Chapter Eleven Chapter 11­ © 2002 McGraw­Hill Ryerson Ltd 14 ... catch-up period Chapter 11 © 2002 McGraw­Hill Ryerson Ltd 10 Hypothetical Assimilation Profile Figure 11. 5 Earnings Immigration Entry effect Native-born 20 (YSM=0) Age 65 (YSM=45) Chapter 11 ... and skilled emigrant reaps the benefits  Possible remedies Chapter 11 © 2002 McGraw­Hill Ryerson Ltd 13 End of Chapter Eleven Chapter 11 © 2002 McGraw­Hill Ryerson Ltd 14 ... © 2002 McGraw­Hill Ryerson Ltd Chapter 11 5 Two Classes Assessed Nonassessed  evaluated on the  family and refugee basis of their likely classes contribution and success in Canadian labour market © 2002 McGraw­Hill Ryerson Ltd