Basic Facts about Immigration. Econ 490/004 Prof. Nicole M. Fortin

Basic Facts about Immigration Econ 490/004 Prof. Nicole M. Fortin

Basic Facts about Immigration to Canada: Who immigrates? Basic questions: 1) How many immigrants are there? 2) Where do they come from? (self-selection) The countries of origin of immigrants have changed over time, but the admission decisions has also changed. 2b) Who to let in? (selection) 3) Where do they live? Let s see what some of the general trends are

Basic Facts about Immigration to Canada: Who immigrates? What is the current immigration policy in Canada, how has this changed from the past, and how does it compare to the United States? It is worthwhile keeping in mind that, except for Aboriginal Canadians, this country is populated exclusively by immigrants or children of immigrants. New data from the National Household Survey (NHS) 4.3% of the total Canadian population had an Aboriginal identity in 2011. Aboriginal people accounted for 3.8% of the population enumerated in the 2006 Census, 3.3% in the 2001 Census and 2.8% in the 1996 Census. Immigration policy in Canada is a complex entity consisting of a interconnected set of guidelines, regulations and actual actions by government. Multiple reasons motivate past and current immigration policy.

Immigration Policy to Canada One cannot fully understand the forces shaping current immigration policy without an understanding how immigration policy evolved. Following trends and relationships over time helps 1) raise questions about how and why these patterns take place, 2) verify or refute previous empirical or theoretical research, and 3) keep the big picture in sight when thinking about a particular topic. With respect to immigration trends, much has changed over time The term "landed immigrant is an old classification for a person who has been admitted to Canada as a non-canadian citizen permanent resident. The current official classification for such a person is simply "permanent resident". We will use both. Foreign-born may include additionally naturalized citizen, other temporary residents, and illegal immigrants

Canada Immigrant Landings, 1860 to 2012 Source: CIC, Facts & Figures

Immigrant landings as a percentage of Canada s population, 1860 to 2012 Source: CIC, Facts & Figures

Number of legal immigrants (in millions) Legal Immigration to the United States by Decade, 1820-2000 10 8 6 4 2 0 1810s 1830s 1850s 1870s 1890s 1910s 1930s 1950s 1970s 1990s Decade

Foreign-Born as Percentage of Total Population in the United States Note: The term "immigrants" refers to people residing in the United States who were not US citizens at birth. This population includes naturalized citizens, lawful permanent residents (LPRs), certain legal nonimmigrants (e.g., persons on student or work visas), those admitted under refugee or asylee status, and persons illegally residing in the United States. Source: The 2011 and 2010 data are from the US Census Bureau's American Community Surveys, the 2000 data are from Census 2000 (see www.census.gov). All other data are from Gibson, Campbell and Emily Lennon, US Census Bureau, Working Paper No. 29, Historical Census Statistics on the Foreign-Born Population of the United States: 1850 to 1990, US Government Printing Office, Washington, DC, 1999.

Illegal Immigration to the U.S.

History of Canadian Immigration Policies European Migration began in the 1600s to Quebec and Atlantic provinces, but policies were about emigration from sending countries (mostly France and Great Britain). But not until, after confederation in 1867 was there a central government to talk of Canadian Immigration Policies. 1870 1913: This was the period which, after a slow start during the last decades of the 19th century, saw the settlement of the west, high levels of investment, and rapid economic growth. The immigrants sought for the Canadian prairies were farmers (preferably from the U.S. or Britain, otherwise (northern) European). 1906 and 1910 Immigration Act: Gave the government enormous discretionary power to regulate immigration through Orders in Council, rather than having to pass legislation through the House of Commons. 1913. Immigration reached a record level of 400,810 new arrivals (the highest level in the century).

http://www12.statcan.gc.ca/census-recensement/2006/as-sa/97-557/vignettes/nathistimmig_ec.swf

History of Canadian Immigration Policies 1915-1919 Very limited immigration during the war. 1919 Revisions of Immigrations Act. These revisions established a literacy test for all prospective immigrants. The net effect was to expand the power of the government over the level, timing and ethnic composition of immigrants. June 1923 Chinese Immigration Act. This Act prohibited all Chinese immigrants except diplomats, students, children of Canadians and an investor class. 1931. After almost six decades of actively recruiting immigrants, the door closed to most newcomers with the passage of Order in Council PC695, and remained that way until after the end of WWII, exceptions to British or U.S. citizens with sufficient means and farmers. These new regulations were a reaction to the Depression.

History of Canadian Immigration Policies 1941 Census. The population of Canada was 11,506,655, of which 17.5% was composed of immigrants (i.e. born outside Canada). 44% of immigrants were born in the British Isles, 14% in the U.S., 7% in Poland and 5% in Russia. There were 29,095 immigrants from China, 9,462 from Japan. While 47% of the total population was rural, only 39.5% of immigrants were. However, more than half of some immigrant groups were rural: Austrians, Belgians, Czechs, Danes, Finns, Germans, Icelanders, Dutch, Norwegians and Swedes. 1942 Immigration reached its lowest level of the century: 7,576. 1945-1947 In the immediate post-war period, immigration controls remained tight, while pressure mounted for a more open immigration policy and a humanitarian response to the displaced persons in Europe.

History of Canadian Immigration Policies 1 May 1947 Prime Minister Mackenzie King made a statement in the House outlining Canada's immigration policy. "The policy of the government is to foster the growth of the population of Canada by the encouragement of immigration. The government will seek by legislation, regulation, and vigorous administration, to ensure the careful selection and permanent settlement of such numbers of immigrants as can advantageously be absorbed in our national economy." 1961 71,689 immigrants arrived - the lowest level since 1947, and a reflection of the economic recession. Feb. 1962 Minister of Citizenship and Immigration Ellen Fairclough implemented new Immigration Regulations that removed most racial discrimination.

History of Canadian Immigration Policies Nov. 1962 Minister of Citizenship and Immigration Richard Bell suggested that immigration should be at the rate of 1% of the population. Despite high levels of unemployment, immigration was increased. Oct. 1967 The points system was incorporated into the Immigration Regulations. The last element of racial discrimination was eliminated. The sponsored family class was reduced. Visitors were given the right to apply for immigrant status while in Canada. Nov. 1967 The Immigration Appeal Board Act was passed, giving anyone ordered deported the right to appeal to the Immigration Appeal Board, on grounds of law or compassion. 1970 The number of people applying for immigration status after entering Canada had "exceeded expectations" and led to a backlog. There were about 8,000 applications in 1967, 28,000 in 1969 and 31,000 in 1970.

History of Canadian Immigration Policies 1970 Immigration from Asia and the Caribbean represented over 23% of the total, compared with 10% four years previously. April 1978 The new Immigration Act came into effect. It identified objectives for the immigration program and forced the government to plan for the future, in consultation with the provinces. Immigrants were divided into four categories: independents, family, assisted relatives and humanitarian. The accompanying Immigration Regulations revised the points system and created the Private Sponsorship of Refugees Program. 1981 Census. Of the total population of 24,083,500, 16% were immigrants (i.e. born outside Canada). 51% of immigrants were female. 67% of immigrants were born in Europe, 14% in Asia, 8.5% in North or Central America, 4.5% in the Caribbean, and 2.7% in Africa.

History of Canadian Immigration Policies 1990 The government unveiled its Five Year Plan for immigration, proposing an increase in total immigration from 200,000 in 1990 to 250,000 in 1992. The long-term commitment to planned immigration was new in Canadian history, as was the proposal to increase immigration at a time of economic recession. 1991 Census. Of the total population of 26,994,045, 16% (4,342,890) were immigrants (i.e. born outside Canada). 54% of immigrants were born in Europe, 25% in Asia, 6% in U.S., 5% in the Caribbean and 4% in Africa. Jan. 1993 Amendments to the Immigration Regulations cancelled the sponsorship required for "assisted relatives" and reduced the points awarded them, making it more difficult for family members (other than nuclear family) to immigrate to Canada.

History of Canadian Immigration Policies 2002: Immigration and Refugee Protection Act (IRPA) came into force June 28, 2002 defines three basic categories of permanent residents, which correspond to major program objectives: reuniting families, contributing to economic development and protecting refugees. 2008: Ministerial instructions changed the way the economic immigrant cases are processed under IRPA. 2008: The Canadian Experience Class (CEC) facilitates access to permanent residence who have recent Canadian work experience or have graduated and recently worked in Canada. 2000s: Temporary Foreign Worker and International Mobility permit holders became a substantial source of entry (176,613 TFW and 161,541 IMPH in 2013), but with perceived abuses in 2014 the former is currently being reformed; International Students (304,876 in 2013) constitute another of foreign nationals with temporary residency

Figure 3 - Temporary Foreign Worker Program work permit holders with a valid permit on December 31 st by flow from top 10 countries of citizenship to destination, 2013 Source: CIC, Facts & Figures

Summary of Major Trends A main defining feature of Canadian immigration policy was flexibility. All major features of the immigrant regulation system were set in place by Order in Council rather than being debated in parliament and being made part of the Act. Another key feature has been an emphasis on absorptive capacity. This was introduced and put into action for the first time in the recession that followed WWI as a response to demands from labour. From that time until 1990, every major increase in unemployment was accompanied by substantial cuts in immigration. The decision to divide the world in to preferred and non-preferred countries and to create different admission rules for each was also made at the end of WWI.

Summary of Major Trends This division continued until the early 1960s when Canada moved officially to a nondiscriminatory policy. Now the government sends the clear message that individuals from any ethnic background can and do contribute to Canada. Although, there are age, language and education preferences Temporary residency has become another means for foreign nationals to work and/or study in Canada albeit on a temporary basis, but sometimes as a means to acquire a more permanent status

Ways to Emigrate to Canada The other main feature of immigration policy that continues to the present is a broad regulatory system set in place in the 1960s. In this system, applicants are divided into classes with different admissions standards and processing priorities for each. Family and refugee class applicants enter based solely on family ties or refugee status while independent applicants must undergo screening under the point system. 1) Family reunification: no consideration of skills or success in labour market: let in based on closely related to family members already in Canada 2) Business investors/entrepreneurs: enough money to and business plan that leads to new employment 3) Point system: assessed based on likely contribution to country 4) Refugees: also no consideration of skills: let in based on humanitarian grounds to facilitate escape from political persecution or violence

How the Point System Works Factors and maximum points obtainable: Selection Factor English and/or French skills 28 Maximum points Education 25 (Canadian BA is worth 21 points) Experience 15 Age 12 (age 18-35 is worth 12 points) Arranged employment in Canada 10 Adaptability Total 100 Pass mark: 67 out of 100 points 10 (past study is worth 5 points, past work is worth 10 points ) See: http://www.cic.gc.ca/english/immigrate/skilled/apply-factors.asp

Basic Facts about Immigration to Canada: Why do people immigrate? Family members may migrate to be close to love ones Refugees migrate for security issues Economic migrants want to improve their economic situation Other reasons:.

Total Immigrants Landing in Canada within the Family, Economic, Refugees, and Other Classes: 1980-2013 Source: CIC, Facts and Figures

Immigrants to Canada by Category: 2006 13% 4% 28% 33% 22% Family Economic: own Economic: spouse and dependents Refugees Other Source: Bourdarbat and Lemieux (2006)

Refugee Claimant Population (Principal Applicants) by Principal Country of Alleged Persecution: Claim Years, 1995 2004 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Zimbabwe Hungary Sri Lanka Pakistan Nigeria Mexico Iran India Congo Colombia China

Annual Flow of Temporary Residents by Category 1988-2012 Source: CIC, Facts and Figures, 2012

Total entries of foreign students by top source countries, 2010-2012 Source: CIC, Facts and Figures, 2012

Basic Facts about Immigration to Canada: Why do people immigrate? But for economic migrants, we can think Economic model: compare potential income in destination country to income in home country: Gain = G compare G to the costs : o loss of family/cultural connections o cost of visa or moving gains G to entering the Canada/US vary depending on source country and skill level of person Immigrants from Europe are highly educated, their lower skilled are better off at home Most people in developing countries (e.g. India) have large potential gains.

Gains for all skill levels

Gains only for high skilled immigrants

Macroeconomic Cycle Effects Unemployment rate, Canada vs U.S. 14 12 Canada 10 8 6 4 2 United States 0 Canada United States

0 500 1,000 1,500 Weekly Earnings over the Life-Cycle Weekly Earnings in 2005 18 to 19 years 25 to 29 years 35 to 39 years 45 to 49 years 55 to 59 years 20 to 24 years 30 to 34 years 40 to 44 years 50 to 54 years 60 to 64 years Canadian-Born Immigrants

Employment Earnings for Skilled Principal Applicants by Landing Year ($2003) 60000 50000 1986 40000 1982 1991 1996 1999 2000 30000 2001 20000 10000 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Tax Year 1982 1986 1991 1996 1999 2000 2001 Entry Canadian

Employment Earnings for All Immigrants by Landing Year ($2003) 60000 50000 40000 30000 1982 1986 20000 1991 1996 1999 2000 2001 10000 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Tax Year 1982 1986 1991 1996 1999 2000 2001 Entry Canadian 39

Economic Integration of Immigrants For both the U.S. and Canada, immigrant men in the 1970s earned about as much as natives, but a wage gap opened up over the 1970s that has persisted. In the U.S., immigrant men s hourly wages are about 20% lower than natives, while immigrant women s wages are about 10% lower. In Canada, the relative earnings of immigrants have been falling since the 1970s Among males, the log earnings ratio at entry declined from 0.83 among the late 1970s cohort to 0.55 among the early 1990s cohort For the early 1990s cohort, it was only 0.7 of Canadians after 6 to 10 years in Canada Even for principal applicants, we see that earnings at entry has deteriorated over time But source countries (and language skills) have also significantly changed over time

Economic Integration of Immigrants In these figures, in comparing the earnings of immigrants to those of the Canadian-born, one has to be mindful of 1) Entry cohorts effects macroeconomic cycle effects country of origin, language factors network effects in finding jobs 2) Assimilation effects (years since migration), confounded by life-cycle effects confounded by re-emigration or returns Also, immigrant class of special interest for policy purposes In addition to demographic shifts among the Canadian-born

Immigration to Canada by Source Region: 1955-2006 300,000 250,000 200,000 150,000 100,000 50,000 0 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 Britain USA Other europe Asia West Indies Other Source: Bourdarbat and Lemieux(2006)

Canada Immigrant Landings by Top Source Countries, 2011-2013 Source: http://www.cic.gc.ca/english/resources/statistics/facts2013/index.asp

Immigrant Landings by Category and Source Area - 2013 Source: CIC, Facts and Figures

US migrant flows, US census bureau

Where do immigrants live? Permanent residents by province or territory and source area, 2013 Source: CIC, Facts and Figures, 2013

Economic Integration of Immigrants Beginning with research by the labour economist Chiswick (1978), there is an extensive literature on the question of whether the immigrant native earnings gap narrows with time and experience after arrival. This is called earnings assimilation, which could occur because of formal or informal training, acquisition of language skills, or a variety of other processes [Cortes (2004), for example, shows that recent immigrant arrivals have relatively high rates of participation in schooling. She finds that 1975-80 immigrant arrivals show a gain in English proficiency between 1980 and 1990].

Annual Earnings (1970 Dollars) Economic Integration of Immigrants Do the immigrants earnings ever converge to those of similarlyskilled natives? 9,000 Immigrants Early studies (Chiswick, 1978) using single cross-sectional analysis misleadingly argued that immigrants s earnings overtook those of natives 10 to 15 years after arrival 8,000 Natives 7,000 6,000 5,000 4,000 20 25 30 35 40 45 50 55 60 65 Age

Economic Integration of Immigrants One has to be careful not to confound so-called economic assimilation of immigrants with cohort effects A solution proposed by Borjas (1994) to follow an entry cohort or a synthetic cohort over pooled cross-sectional address the problem Dollars P Q Q* P* C P Q R 1960 Wave 1980 Wave and Natives 2000 Wave But two selection issues remain Return migration: Do the successes or failures leave? Child immigrants R C R* 20 40 60 Age

Economic Integration of Immigrants With pooled cross-section data (from a few Censuses), we can run the standard regression (e.g. Borjas, 1985) to identify the immigrant entry earnings and assimilation effects thus include, at a minimum, the following terms: ln W =β 0 + β 1 * EXP + β 2 EXP 2 + β 3 School + β 4 X + I * (δ 0 + Σ j δc j + α YSM + δ 1 *X) + u where W is the weekly wage; EXP is years of labour market experience; S is years of schooling; I is an immigrant dummy; C j are cohort dummies identifying the period of arrival; YSM is years since migration; X is a vector of individual characteristics, which may include country of origin, language skills, network variables, etc.; and u is an iid error term.

Immigrant Landings by Level of Education - 2006 250,000 200,000 150,000 100,000 50,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 0 to 9 years of schooling 10 to 12 years of schooling 13 or more years of schooling Trade certificate Non-university diploma Bachelor's degree Master's degree Doctorate Source: CIC, Facts and Figures

Characteristics of the Canadian-born and Recent Immigrants Frenette and Morissette, 2003

Frenette and Morissette, 2003

Economic Integration of Immigrants From Table 1, compared to Canadian born individuals, recent immigrants are generally more educated. The gap has been widening. Despite this, immigrants who came to Canada in the 1980s still had, 15 years after arrival, substantially lower earnings than Canadian born workers. There does not appear to be any sign of catch-up (assimilation). Even considering immigrants and natives with similar education, potential work experience, marital status, visible minority status, and region, the right hand side of Table 2 still finds that immigrants earn substantially less. The finding that relative earnings of recent immigrants did not improve between 1990 and 2000 is surprising in light of the fact that the supply of university graduates has grown much faster among recent immigrants than among Canadian born workers over the last decade.

Economic Integration of Immigrants Green and Worswick (2002), Aydemir and Skuterud (2004, 2005) and Frenette and Morissette (2003) concluded that during the 1980s and 1990s the declining returns to experience was one of the major factors, if not the most important, associated with the decline in earnings among recent immigrants. Aydemir and Skuterud who used the complete 20% microdata files of the 1981, 1986, 1991, 1996, and 2001 Canadian Censuses concluded that, among recent immigrants, The decline in the return to foreign experience accounted for roughly one third of the decline in entry level earnings reported earlier. Another third of the decline is explained by compositional shifts in language ability and region of birth.

Economic Integration of Immigrants Aydemir and Skuterud (2007) also find that immigrants in Canada are highly nonrandomly sorted across firms within major cities, and for men, this sorting is a more important source of immigrant wage differentials than differences in how immigrant men are paid within establishments. For immigrant women, those from less developed regions, within establishment wage differentials appear more important.

Opportunities and Barriers to Economic Integration Much has been written about the barriers, immigrants face in adapting to their country of settlement, devaluation of credentials and experience acquired in their home country, a lack of proficiency in the official language(s) of the host country, cultural differences, and a lack of social networks. These last two set of factors can be linked the immigrants ethnic capital, which like social capital, can create important social and economic connections and networks. Perhaps the credentials or value of a foreign degree, or the type of education for immigrants differs in important ways from the education of natives. The results could also suggest discrimination (of various types) among immigrants in the labour market, or growing importance in language skills.

Opportunities and Barriers to Economic Integration These findings are of concern to Canadian policy makers because they imply that, despite an upward trend in the educational attainment of Canada s new immigrants over this period, more recent arrivals are, if anything, facing greater challenges competing in Canada s labour markets. This raises questions about the role of immigration in providing Canada with a source of highly skilled individuals to boost economic growth. It also has important implications for the use of government transfer programs, such as social assistance and child tax benefits, as well as for income tax revenues.