This essay has been submitted by a student. This is not an example of the work written by professional essay writers.
Uncategorized

The effect of immigration and ethnic diversity on the Canadian Economy

Pssst… we can write an original essay just for you.

Any subject. Any type of essay. We’ll even meet a 3-hour deadline.

GET YOUR PRICE

writers online

The effect of immigration and ethnic diversity on the Canadian Economy

Introduction

The number of immigrants welcomed in Canada between 2008 and 2009 increased by 2.0% to a high of 252,172(Akbari, 1989, p. 12). The increase is 33% higher than the number of immigrants that arrived in the country in 1999. The study will, therefore, make use of the current information on immigration to analyze the impact that immigration has on economic growth. The main components that will be analyzed in the paper include both micro and macro elements.

The importance of the study is in the fact that western populations have been on the decline in the recent past. The growth rate, which has been declining, will affect the availability of labor in future. The effect will be a resultant negative growth of the Economy (Akbari, 1989, p. 15). The solution lies in immigration, which has been seen as a solution to reversing these trends. Immigration is, therefore, at the center of regional economic growth strategy where Canada lies.

The empirical study, evidence from the report, and any other relevant information can offer important input to policymakers in the implementation of evidence-based actions. The launch of the Atlantic Growth Strategy has been seen as a measure through which Canada growth can be improved. The AGS is important in driving the long-term growth plans of Atlantic Canada (Akbari, 2011, p. 121). Among the five pillars of the AGS is shaping Canada as a destination of choice among immigrants.

Estimates that are to be provided through the research will act as important components in driving policy for the smaller provinces. The second section of the paper discusses the history of immigration in Canada and, by extension, the western countries. The recent trends in immigrant arrivals in Canada are also assessed. The factors that lead to immigration are also analyzed. The paper also proceeds to assess what the project seeks to achieve and data description in the fourth chapter.

Motivation, facts, and figures on Immigration in Canada

The two historical colonial periods recognized in Canada include New France from 1604 to 1763. The second period was by British North America from 1670 to 1873 (Akbari, 2011, p. 15). The period with New France was associated with two main populations. One group in Quebec and another in the Maritimes. People of the French origin heavily relied on livestock, fisheries, and crops. The Conquest by the British meant that the population of Canada remained static for a generation.

Peace was concluded in 1783, leading to an influx of migrants north into the remaining British colonies. The new influx of people had an effect on Canada’s commercial balances, religion, and linguistics. With the recent changes in developed countries, there has been regionalization of the immigration policy. There has been a decline in fertility, and the resulting aging population means that industries are starved of the required labor force.

There has been an emergence of regional imbalances with how economic development has been distributed. Industries are also less motivated in setting up of industries because of perceived shortages of labor force in the market. Low population also mean that the markets will continue to shrink in the long run, and this points to the fact that population is an important aspect for an economy. The immigration policy of the country seems to work when compared to the neighboring United States.

Immigrants can lower wages in the country as they will compete with domestic workers for jobs. The effect will be on a large scale as their skills can be easily substituted by immigrants. If the immigrants are low-skilled they it is expected that wages among the low-skilled workers will fall in relative terms. It is also expected that wages for the high-skilled workers will increase over the same period if immigrants are compliments to low-skilled workers.

Project Summary

The huge influx of immigrants in Canada generates interest among policymakers on how the immigrants fare in the labor markets and their effect at the micro and macro levels of the Economy. The paper seeks to understand the effects that immigration has on both the macro and micro Economy with attention being given to the macro components. With the question of how the immigrants are faring within the Canadian Economy, it can be found that they are having problems economically.

The immigrants cannot integrate or assimilate into the Canadian labor market. The immigrants cannot, for example, catch up with the earnings of domestic-born workers, although they have similar characteristics as far as wage-earning is concerned. The assimilation has even been slower with the new crop of immigrants who might not catch up with the current earnings of the domestic-born workers.

Evidence on the effects of immigrants to the Canadian Economy

Environment and context

With respect to the impact of immigration on the Canadian Economy, the paper will make use of different sources of evidence. The aim of using the mixes of evidence is to gather more evidence that can be used to make the findings of the study concrete. There will be extensive use of secondary evidence and data analyzed through the use of excel. The effect of immigration on the labor market can, for example, be quantified based on the exit of workers in the market where workers find their jobs being negatively affected by immigrants.

A comprehensive review of literature that deals with immigration and its effect on global economies will be assessed. The effect of immigration will be assessed through four dimensions that include employment, impact on wages, labor force participation, and the effect at the macro and micro-economic level. The results for each component are to be regressed, and the extent of dispersion used to assess the relative behavior of each component towards immigration.

YearPopulation, landed immigrantsEmployment, landed immigrantsPopulation, born in CanadaEmployment, born in Canada
2006 = 100
2006100100100100
2007101.56101.87100.37101.24
2008102.81102.51100.63101.85
2009104.22100.59100.9199.78
2010105.9102.53100.91100.06
2011109.75106.8999.999.71
2012111.93110.6699.2899.45
2013115.33114.6298.3698.7
2014117.42115.6598.1698.26
2015120.88119.9197.6297.93
2016127126.8896.1996.41
2017128.56130.5195.9597.06

 

Chart 1: The downward trend in employment for the citizens born in Canada in line with the aging population

The year 2007 depicts that 34% of the employment gains among the Canadian-born citizens were between the ages of 25 to 54. The corresponding figure for the Canadian immigrants was at 75%. It can be evidenced that majority of the immigrants between the ages of 25 to 54 were selected while they were in their prime ages. The influx of immigrants in Canada, therefore, has an effect of increasing the level of competition for the already existing jobs. The data analyzed was entirely based on secondary data. The effect is a resultant unemployment among the Canadian natives. The difference between the Canadian-born employment rates and the immigrants is evidence of the increasing gap within the baby-boom generation.

There was a steady decline in the Canadian born labor force between the years 2006 and 2017 from 78% to 74%. The same period saw an increase in the share of immigrant employment rates within the same Canadian territory from 22% to 26%. This can be observed from the chart of long-term trends in employment rates within chart 1. There has been a growing contribution from the immigrant population over the same period. The associated demographic changes and trends can be observed in other industrialized countries.

Challenges and issues in project implementation

Conducting research for such a dynamic and emotive issue has its share of challenges. Statistics Canada offers variable data and information and key economic demographics (Chowdhury & Serieux, 2018, p. 230). It has a huge contribution towards completing the project. The agency also offers substantive data, which is important for comparison purposes. The first problem is in finding the study participants. The immigrants are hugely dispersed within the Canadian Economy, and the associated costs mean that the study has to highly rely on secondary data set.

The second challenge is that dependence on secondary data means that an up to date understanding of the current situation cannot be projected with certainty. There is a heavy reliance on historical information and trends which is subject to change. Economic components within any society are subject to changes in other variables. Immigration can be affected with the existing policies by the government an example being the need by government to curb the unregulated influx of people in the country. Such a cautious move by the government might imply that a low number of immigrant population will give opportunities to the natives to access job opportunities.

The third challenge is in dealing with the massive data on immigration, employment, and articulating of other labor-related policies in an effort to understand the different dynamics in Canada. All the efforts are towards making sense of the data that has been collected. The analysis has to be organized around the research questions. The dynamic nature of data gathered also means that no single method or approach can be regarded as being sufficient for data analysis. The data also need to address the bias that is a common phenomenon within any analysis model. There is need to explain the individual bias towards the study so that conclusions can be made with certainty.

Outcomes and policy implications

The number of immigrants that are received in Canada has increased to a high of 250,000, and another feature is that there education levels have continued to improve (Chowdhury & Serieux, 2018, p. 227). The effect of immigration on GDP is that it leads to a slight fall in the real GDP per capita. The reason is that immigrants are initially paid below what is commonly referred to as “base-case” workforce. There is a light increase within the initial phases as an increase in immigrants has an effect of increasing productivity due to readily available labor in the market.

Regarding the effect on unemployment, immigration is expected to increase the aggregate demand for goods and services. The effect is expected to be off-set by the increase in unemployment when the immigrants enter the job market to look for employment opportunities in the long-run. The long-run will be characterized by in investment in non-residential and machinery-and-requirement, a set of core components important in increasing the productivity levels in an economy. There will be a general growth in the Economy, there will be new capital investments with immigration, and corporate profits will also be positively impacted.

The response within the Bank of Canada has been to maintain the base-case inflation path, which has been projected at 2%. There is a requirement on the bank to increase the monetary aggregates because, with the influx of immigrants, there is potential for the Economy to grow. There will be mixed pressures on the exchange rate. The funds brought by the immigrants will lead to appreciation of the dollar. The remittances that are to be made by the immigrants will, however, have an offsetting effect on the gains made over the same period.

Conclusion

The set of results from the research indicate that immigration will have a positive impact on the Canadian Economy. The effects will be in the labor market as well as the Economy in general. There will be positive growth in the level of aggregate demand, real GDP, and GDP per capita, government expenditures, and productivity. Significant increases will also be observed in areas of taxes raised, and there is no observed effect on the level of unemployment.

The real effect is however, on the immigrants as they face hurdles in their process of assimilating into the Canadian labor market. Majority of the immigrants are therefore falling to poverty. The existing immigrants will be affected by a new influx of immigrants as they will act as substitutes. They will dilute the already existing job opportunities that are usually occupied by low-skilled workers. There is a need for Canada to improve the integration of immigrants into the Economy which will not only be for their benefit. The integration is also expected to enhance the impact that immigrants have on the Canadian Economy.

References

Akbari, A. H. (1989). The benefits of immigrants to Canada: Evidence on tax and public services. Canadian Public Policy / Analyse de Politiques, 15(4), 424.

Chowdhury, M., & Serieux, J. (2018). Education and the sustainability of immigrant health: Canadian evidence. Canadian Public Policy, 44(3), 226-240.

Akbari, A. H. (2011). Labor market performance of immigrants in smaller regions of western countries: Some evidence from Atlantic Canada. Journal of International Migration and Integration / Revue de l’integration et de la migration internationale, 12(2), 133-154.

  Remember! This is just a sample.

Save time and get your custom paper from our expert writers

 Get started in just 3 minutes
 Sit back relax and leave the writing to us
 Sources and citations are provided
 100% Plagiarism free
error: Content is protected !!
×
Hi, my name is Jenn 👋

In case you can’t find a sample example, our professional writers are ready to help you with writing your own paper. All you need to do is fill out a short form and submit an order

Check Out the Form
Need Help?
Dont be shy to ask