IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/37406.html
   My bibliography  Save this paper

Fiscal transfers to immigrants in Canada: responding to critics and a revised estimate

Author

Listed:
  • Grubel, Herbert
  • Grady, Patrick

Abstract

In 2011, we estimated that in 2005 Canada’s immigrant selection policies resulted in an average fiscal burden on taxpayers of $6,000 for each immigrant. Later that year, Mohsen Javdani and Krishna Pendakur from the economics department at Simon Fraser University (J&P hereafter) presented an alternative estimate of this fiscal burden of $450. This study concludes that J&P’s lower estimate is due mainly to their choice of a different immigrant cohort and assumptions about the immigrants’ absorption of government spending on pure public goods, education, and public housing. After taking into account some new data and some issues raised by J&P, this study presents new estimates that show that the fiscal burden imposed by the average recent immigrants is $6,000, which for all immigrants is a total of between $16 billion and $23 billion per year, figures virtually identical to those found in our earlier study. This study also rejects arguments made by J&P that immigrants are needed to meet labour shortages, that they bring productivity-increasing economies of scale, and that their children will repay the fiscal burden. New evidence does not provide any grounds for optimism that the offspring of recent immigrants are going to be able to earn enough to compensate current and future generations of Canadians for the fiscal transfers made to their parents by existing Canadians. This study also presents new evidence showing that immigrants who were admitted mainly on the basis of pre-arranged jobs have superior economic performance, which supports the policy recommendation made in our 2011 study.

Suggested Citation

  • Grubel, Herbert & Grady, Patrick, 2012. "Fiscal transfers to immigrants in Canada: responding to critics and a revised estimate," MPRA Paper 37406, University Library of Munich, Germany, revised 06 Mar 2012.
  • Handle: RePEc:pra:mprapa:37406
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/37406/1/MPRA_paper_37406.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grubel, Herbert & Grady, Patrick, 2011. "Immigration and the Canadian Welfare State 2011," MPRA Paper 31109, University Library of Munich, Germany.
    2. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
    3. Picot, Garnett & Sweetman, Arthur, 2011. "Canadian Immigration Policy and Immigrant Economic Outcomes: Why the Differences in Outcomes between Sweden and Canada?," IZA Policy Papers 25, Institute of Labor Economics (IZA).
    4. Grady, Patrick, 2011. "How are the Children of Visible Minority Immigrants Doing in the Canadian Labour Market?," MPRA Paper 28503, University Library of Munich, Germany.
    5. Jamie Partridge & Hartley Furtan, 2008. "Immigration Wave Effects on Canada's Trade Flows," Canadian Public Policy, University of Toronto Press, vol. 34(2), pages 193-214, June.
    6. James Ted McDonald & Casey Warman & Christopher Worswick, 2015. "Immigrant Selection Systems and Occupational Outcomes of International Medical Graduates in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 41(s1), pages 116-137, August.
    7. Ather H. Akbari, 1989. "The Benefits of Immigrants to Canada: Evidence on Tax and Public Services," Canadian Public Policy, University of Toronto Press, vol. 15(4), pages 424-435, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Poniatowicz Marzanna & Piekutowska Agnieszka, 2019. "The Fiscal Effects of Economic Immigration on Subnational Government Finance in Poland," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 15(1), pages 45-58, March.
    2. Grady, Patrick, 2013. "Conservative Immigration Policy Reform Has Not Yet Produced Any Significant Improvement in the Aggregate Labour Market Performance of Recent Immigrants," MPRA Paper 55586, University Library of Munich, Germany.
    3. Grady, Patrick & Grubel, Herbert, 2015. "Immigration and the Welfare State Revisited: Fiscal Transfers to Immigrants in Canada in 2014," MPRA Paper 67944, University Library of Munich, Germany.
    4. Patrick, Grady, 2015. "An Assessment of the Impact of Conservative Immigration Reform on the Labour Market Performance of Immigrants," MPRA Paper 65529, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas Hatzigeorgiou & Magnus Lodefalk, 2016. "Migrants’ Influence on Firm-level Exports," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 477-497, December.
    2. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2012. "The impact of immigration on international trade: a meta-analysis," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 9, pages 301-337, Edward Elgar Publishing.
    3. Partridge, Jamie & Furtan, William Hartley, 2008. "Increasing Canada's International Competitiveness: Is There a Link between Skilled Immigrants and Innovation?," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6504, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    5. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2016. "The Brexit Trade Disruption Revisited," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 17(1), pages 1-18.
    6. Antonella Bellino & Giuseppe Celi, 2016. "The Role of Migration in the Variety and Quality of Trade: Evidence from Germany," German Economic Review, Verein für Socialpolitik, vol. 17(1), pages 1-25, February.
    7. Grady, Patrick, 2011. "A Critique of “Macroeconomic Impacts of Canadian Immigration… Using the Focus Model” (Dungan, Fang and Gunderson, 2010)," MPRA Paper 65454, University Library of Munich, Germany.
    8. Robert E.B. Lucas, 2014. "The migration–trade link in developing economies: a summary and extension of evidence," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 11, pages 288-326, Edward Elgar Publishing.
    9. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    10. Giulia Bettin & Alessia Lo Turco, 2012. "A Cross-Country View on South-North Migration and Trade: Dissecting the Channels," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(4), pages 4-29, July.
    11. Peter Dungan & Tony Fang & Morley Gunderson, 2013. "Macroeconomic Impacts of C anadian Immigration: Results from a Macro Model," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 174-195, March.
    12. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    13. Aziz Nusrate & Aziz Ahmed, 2023. "Recent vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 14(1), pages 1-33, December.
    14. BELLINO, Antonella & CELI, Giuseppe, 2016. "The Migration-Trade Nexus in the Presence of Vertical and Horizontal Product Differentiation," CELPE Discussion Papers 137, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    15. Balli, Faruk & Balli, Hatice O. & Jean Louis, Rosmy, 2016. "The impacts of immigrants and institutions on bilateral tourism flows," Tourism Management, Elsevier, vol. 52(C), pages 221-229.
    16. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    17. Luca Marchiori & I-Ling Shen & Frédéric Docquier, 2013. "Brain Drain In Globalization: A General Equilibrium Analysis From The Sending Countries' Perspective," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1582-1602, April.
    18. Yuheng Lin & Dooruj Rambaccussing & Yu Zhu, 2024. "The impact of international students in the UK on the cultural goods trade," French Stata Users' Group Meetings 2024 29, Stata Users Group.
    19. Roy Allen & John Rehbeck, 2019. "Assessing Misspecification and Aggregation for Structured Preferences," University of Western Ontario, Departmental Research Report Series 20194, University of Western Ontario, Department of Economics.
    20. Ghatak, Subrata & Piperakis, Andromachi S., 2007. "The impact of Eastern European immigration to UK trade," Economics Discussion Papers 2007-3, School of Economics, Kingston University London.

    More about this item

    Keywords

    taxes; benefits; fiscal cost of immigration; recent immigrants to Canada;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:37406. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.