Sociology 339F Immigration and Employment http:www.utoronto.caethnicstudiesSOC339.html

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Sociology 339FImmigration and Employmenthttp//
www.utoronto.ca/ethnicstudies/SOC339.html

• Instructor Prof. Jeffrey G. Reitz
• Department of Sociology
• Ethnic, Immigration and Pluralism Studies
• Munk Centre for International Studies
• University of Toronto
• Fall, 2007

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Sociology 339FImmigration and EmploymentSession
2 September 18Immigrant Economic Impact and
Trends in Immigrant Earnings

• Readings
• Peter Li, Destination Canada Immigration Debates
  and Issues, Don Mills, ON Oxford University
  Press, 2003, Chapter 5, Economic Benefit of
  Immigration, pp. 78-99.
• Statistics Canada Special Surveys Division,
  Longitudinal Survey of Immigrants to Canada A
  Portrait of Early Settlement Experiences, Ottawa
  Statistics Canada, 2005, pp. 7-21, 29-35, 46-73.

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Is Immigration Good for the Economy?

• Immigration and economic development

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Immigration and Economic Development

• Three Phases of Economic Development ?
• Three Phases of Immigration
• 1. Agricultural Economy (1860 1900)
• Immigration to Settle Rural Areas in the West,
  Build railroads
• 2. Industrial Economy (1900-1960)
• Immigration to Settle Urban Areas
• Renewed after World War II
• 3. Post-Industrial, Knowledge Economy (1960
  present)
• High-skilled Immigration

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Global Migration, 17th 19th Centuries
Source Castles and Miller, Age of Migration, 2003
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Global Migration 1850-1920
Source Castles and Miller, Age of Migration, 2003
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Global Migration 1945 - 1973
Source Castles and Miller, Age of Migration, 2003
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Global Migration Since 1973
Source Castles and Miller, Age of Migration, 2003
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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories

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Permanent immigrants to Canada, 1971-2005
Source Citizenship and Immigration Canada
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Immigrants to Canada, 1980-2005by admission
category(green is skill-selected)
Source Citizenship and Immigration Canada
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Points System Sept. 22, 2003

• Education 5-25 H.S. ? PhD
• Official language knowledge 0-24 English, French
• Work experience 15-21 1-4 years
• Age 10 21-49 years
• Arranged Employment 0-10 HRDC confirmed
• Adaptability 0-10
• Spouse education, Canadian education or
  experience, family contacts
• Pass Mark 67 out of maximum 100
• Source Citizenship and Immigration Canada
• http//www.cic.gc.ca/english/skilled/qual-5.html

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Example

• Education 20 BA
• Official language knowledge 16 Fluent in English
• Work experience 17 2 years
• Age 10 21-49 years
• Arranged Employment 0 No job
• Adaptability 5 Spouse with BA
• 68
• ? Pass (by one point)

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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories

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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories
• Business immigration, investors

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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories
• Business immigration, investors
• Landing fees

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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories
• Business immigration, investors
• Landing fees
• Settlement services

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Skilled Immigrationand the Canadian Points
System

• Two key policy changes
• 1962 abolish origins restrictions
• 1967 establish points system for independent
  immigrants
• Operation of selection system, managerial style
• Upgrading points criteria
• Economic and other immigration categories
• Business immigration, investors
• Landing fees
• Settlement services
• Decentralization to provincial selection,
  especially in Quebec

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Is Immigration Good for the Economy Today?

• Must be skilled?
• Points system
• Milton Friedman, avoiding welfare dependence

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Its just obvious you cant have open
immigration and a welfare state. informal quote
Milton Friedman, 1912-2006
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Is Immigration Good for the Economy Today?

• Must be skilled?
• Points system
• Milton Friedman, avoiding welfare dependence

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Is Immigration Good for the Economy Today?

• Must be skilled?
• Points system
• Milton Friedman, avoiding welfare dependence
• Consensus among todays economists
• Immigration a small plus
• Basis Borjas, Economic Council of Canada
• Cited by Daniel Stoffman, Who gets in? Whats
  wrong with Canadian immigration and how to fix it
  (2002)

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Friends or Strangers? (1990) Heavens Door (1999)
George Borjas, Harvard labour economist of
immigration
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George Borjas (Heavens Door)

• Immigrants stimulate the economy (percapita
  earnings) to the extent they
• supply labor
• work at low wages cutting costs of goods produced
• create additional consumer demand (buy things),
• increase population size and hence economic
  scale,
• become entrepreneurs, generate further labour
  demand,
• pay taxes,
• attract tourists
• Immigrants hurt the economy to the extent they
• undercut wages of native-born workers
• use more in welfare services than they contribute

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Borjas Sample calculation, Heavens Door, Chap. 5

• Agricultural workers impact on prices and wages
• Price impact (positive) is larger and more
  general than wage impact (negative)
• Net effect is small 0.1 of GDP, 8b., 30
  per person
• Redistributive effect relatively large, 152b.
• Only partial effect, not entire list benefits
  of immigration arise because immigrants reduce
  the native wages (p. 90)
• Apply to Canada? (Yes, according to Stoffman)
  BUT
• No account taken of skills!
• Because of higher skills, immigrant effects may
  be different, both regarding prices and wages

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Economic Council of Canada

• Dissolved in 1993
• Economic and Social Impacts of Immigration (1991)
• Supported immigration as small but significant
  plus
• Calculation of economic effect
• Based on effect of population size
• Estimated impact of population size on economic
  growth (percapita incomes), using data on sample
  of countries over time
• Conclusion small plus
• Difference from Borjas calculation
• Different mechanism (from Borjas list), should
  effects be added?
• Also no account taken of impact of skills!!

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Is Immigration Good for the Economy Today?

• Must be skilled?
• Points system
• Milton Freidman, avoiding welfare dependence
• Consensus among todays economists
• Immigration a small plus
• Basis Borjas, Economic Council of Canada
• Cited by Daniel Stoffman, Who gets in? Whats
  wrong with Canadian immigration and how to fix it
  (2002)

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Is Immigration Good for the Economy Today?

• Must be skilled?
• Points system
• Milton Freidman, avoiding welfare dependence
• Consensus among todays economists
• Immigration a small plus
• Basis Borjas, Economic Council of Canada
• Cited by Daniel Stoffman, Who gets in? Whats
  wrong with Canadian immigration and how to fix it
  (2002)
• Creative contribution?
• Richard Florida immigrants part of creative
  class
• Another item on Borjas list

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http//creativeclass.com/
Click on The Colbert Report interviews Richard
Florida
Richard Florida, Ph.D, Urban Planning, Columbia
University
I think youre a gay bohemian artist who just
wants to sell his house. Stephen Colbert
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Floridas Diversity Index for Cities

• Components
• melting pot index (based on immigration in the
  city),
• gay index,
• bohemian index (the proportions of writers,
  designers, musicians, actors and other artists)
• Correlated with economic growth, but does
  diversity cause affluence?
• Correlation does not mean causation
• even Stephen Colbert noted that affluence may
  cause diversity
• Florida responded that both are probably true
  (lecturers emphasis)
• Inter-urban migration may mean effects diffused
  across areas

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Saskia Sassen The Global City (1991)

• Immigrants
• Respond to globalization
• Serve global elite
• Create inequality
• Effect is part of globalization
• Is Toronto a global city?

Saskia Sassen, (Urban planning, Columbia)
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Summary Economic Effects

• Economic consensus small plus
• Other social scientists various effects
• Evidence limited, based on analysis of different
  effects, and rarely takes account of skills of
  immigrants, presumed to be significant by almost
  all analysts
• Canadian policy assumes large plus
• Who is right?

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Trends in Economic Success of Immigrants

• High and rising immigrant skills (human capital)
• Decline in immigrant employment in recent years

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Trends in relative earnings of immigrant menby
arrival cohort, ages 20-64
21-25 years
16-20 years
11-15 years
6-10 Years
0-5 years
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Trends in relative earnings of immigrant womenby
arrival cohort, ages 20-64
21-25 years
16-20 years
11-15 years
6-10 Years
0-5 years
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• Toronto Star, Nov. 21, 1999

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Earnings trends for immigrant men
Source Frenette and Morissette, Statistics
Canada, 2003
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Determinants of Immigrant Employment Success

• Individual Characteristics of Immigrants
• Selection and settlement, outmigration, illegal
  migration
• Human capital
• Origins
• Social and cultural capital
• Treatment of Immigrants within Institutions
• Discrimination
• Assessment of Qualifications
• Structure of Institutions
• Labour markets, e.g. union strength
• Other institutions, e.g. educational institutions

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Some reasons offered for decline

• Business cycle effects
• But expected rebound in late 1990s not seen in
  2001 census data
• Origins shift
• But decline applies to most origins groups
• Lack of language skills
• Debate over measurement of language
• Adverse conditions for all new labor market
  entrants
• Not specifically an immigration problem
• Increased credential competition
• Immigrants disadvantaged because of
  non-recognition of qualifications

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Canadian policy options in response to decline

• Upgrade selection, intensify skilled immigrant
  recruitment?
• Abandon mass immigration?
• Do nothing? Accept immigrant poverty? Wait for
  second generation?
• Integrate immigrants in knowledge economy

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Issues for Discussion

• Should Canada abandon emphasis on skilled
  immigration?
• Can social capital become basis for immigrant
  selection?
• Can social capital of immigrants be enhanced?
• How can transferability of immigrant human
  capital be enhanced?
• Do Canadian labour markets discriminate
  systematically against immigrants or minorities?

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Sociology 339FImmigration and EmploymentNext
Week Session 3 September 25Immigrant Human
Capitaland Skill Under-utilizaation

• Readings
• Jeffrey G. Reitz, 2001. Immigrant Skill
  Utilization in the Canadian Labour Market
  Implications of Human Capital Research," Journal
  of International Migration and Integration,
  2(3)347-378.
• Peter S. Li, 2001. "The market worth of
  immigrants' educational credentials." Canadian
  Public Policy, 27(1)23-38.