Immigration Economic Impacts in Canada – What the evidence says overall

International studies of advanced economies often show an increase in immigration to be associated with a modest increase in GDP per capita. Research by the IMF suggests that “Immigration significantly increases GDP per capita in advanced economies.” A study of OECD countries found that increases in immigration lead to proportionate but smallincreases in GDP per capita. Other research on 22 OECD countries found a positive relationship between immigration and GDP per capita. 11 Still, research on the topic is not unanimous that GDP per capita grows with immigration.

In part, this is because most of the research about immigration and prosperity focuses on the short-term. But the long-term may be where the most significant impacts lie. In Canada we know that the children of immigrants (and immigrant children) often fare well, which suggests another long-term benefit of immigration, but there is little data on the net impact of second- and third-generation arrivals on GDP per capita in Canada.

While there is considerable international research, the effects of immigration on GDP per capita in Canada have not been studied heavily. In one study, the OECD found that a 1%-point increase in migration leads to a 0.19% increase in GDP per capita in Canada. Other research suggests small negative effects on GDP per capita in Canada, but with important caveats. For example, one paper finds that while immigrants to Canada might slightly decrease GDP per capita in the long run, they actually increase GDP per capita of the non- immigrant population. Another paper finds that even though high-skilled immigration boosts Canadian productivity, it slightly decreases GDP per capita in the short run because many high-skilled immigrants spend time in postsecondary education in the years after arrival — in part to overcome regulatory barriers to working in their fields.

Chosen excerpts by Job Market Monitor. Read the whole story @  The impact of immigration on prosperity in Canada – Key Insight Report #3