Academic journal article Canadian Ethnic Studies Journal

Diminishing Returns to Immigration? Interpreting the Economic Experience of Canadian Immigrants

Academic journal article Canadian Ethnic Studies Journal

Diminishing Returns to Immigration? Interpreting the Economic Experience of Canadian Immigrants

Article excerpt

ABSTRACT/RESUME

Concern over "diminishing returns" to immigration in Canada centres on the declining "quality" of recent cohorts of immigrants. Greater priority assigned to family and refugee classes at the expense of independent or "economically-assessed" entrants, and the accompanying shift in region of source from developed towards less developed countries, is associated with lower skill levels and a worsening economic performance of immigrants relative to native-born Canadians. Accordingly, recent policy discussions emphasize the need to attract immigrants with a large endowment of "human capital," entrepreneurial skills, or funds for investment. This paper reviews the existing economic literature and suggests that despite the deteriorating economic experience of immigrants, they continue to make a positive contribution to the Canadian economy. The research surveyed also questions the objective of seeking more highly-skilled individuals, entrepreneurs, and investors.

La preoccupation concernant les [much less than]rendements decroissants[much greater than] de l'immigration au Canada se concentre sur la [much less than]qualite[much greater than] des recentes cohortes d'immigrants. La plus grande priorite accordee a la famille et aux classes de refugies aux depens des nouveaux venus independants ou [much less than]evalues sur le plan economicque[much greater than], et le mouvement connexe de la region source des pays developpes aux pays moins developpes, sont lies aux niveaux de capacites moindres et au rendement economique defavorable des immigrants par rapport aux Canadiens de naissance. En consequence, les discussions recents sur ces politiques font ressortir le besoin d'attirer les immigrants possedant une grande richesse de [much less than]ressources humaines[much greater than], de competences en gestion d'entreprise ou de fonds a investir. Cette communication examine la documentation economique existante et suggere que malgre l'experience economique decroissante des immigrants, ils continuent d'apporter une contribution positive a l'economie canadienne. La recherche a aussi mis en question l'objectif de rechercher des personnes d'une plus grande competence, des entrepreneurs et des investisseurs.

Canada's immigration policy is the outcome of political compromise: humanitarian goals of family reunification and protection to refugees are balanced against the objective of maximizing the economic contribution of immigrants. In evaluating the appropriate trade off, recent attention has focused on the "diminishing returns" to immigration. Greater priority assigned to family and refugee classes at the expense of independent or "economically-assessed" entrants, and the accompanying shift in country of source from developed towards less developed countries, have reduced the economic benefits of immigration for the Canadian economy. This has prompted the current policy debate over whether Canada should "stay the course" or seek to alter the size and composition of annual immigration flows.

The shift in priority between family, refugee and independent class immigrants occurred gradually. In the late 1960s, independent immigrants were the primary vehicle for meeting specific shortages of skilled workers. The point system, introduced in 1967, formalized a system of matching independent immigrants to occupational demand. Complementing this supply-side thrust, immigrants were also seen as a means for expanding the size of the domestic market and stimulating economic activity. In an era in which Keynesian demand-management was in its primacy, with a rapidly growing economy, and with the main sources of immigration from traditional European countries, economic, political and social objectives enjoyed a relatively harmonious co-existence.

By 1978, however, arrivals under the family and refugee classes outstripped the number of independent entrants and prompted concerns over the diminishing returns in the "quality" of immigrants. …

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