What’s the good of immigration?

by Claude Lavoie. Originally published on Policy Options
July 13, 2023

(Version française disponible ici)

For some, immigration is a problem: the rise of human trafficking, the perceived pressures on employment, culture, values, the French language in Quebec, and so on. For others, it’s a solution to labour shortages and an aging population. This debate has only just begun, as growing global inequalities and climate change will continue to increase migratory pressures around the world.

Why welcome immigrants? What’s in it for citizens, apart from increasing their culinary offerings? The Immigration Canada website talks about “growing the economy through immigration,” the most oft-cited benefit, which is stating the obvious. But for us to benefit from immigration, it must increase the size of the economy per person – commonly measured by gross domestic product per capita. Here, the answer is less positive, and varies according to the type of immigrants and their ability to integrate our society.

Neither positive nor negative

There are three main types of immigrants. Economic immigrants, chosen for their human capital and representing 25 per cent of all immigrants to Canada, integrate well. It takes them less than five years after arrival, on average, to do as well or better economically than someone born in Canada. Their impact on the average Canadian’s standard of living is therefore negative in the early years, but positive thereafter.

The family members who accompany them or join them later, representing 60 per cent of immigrants, have more difficulty and take one to two decades to do as well as someone born here. And, of course, those who have the most difficulty are refugees (15 per cent of immigrants). Most of them will never reach the standard of living of the average Canadian. Although this suggests that the economic contribution of immigrants to per capita income is rather negative, that only concerns the first cohort of immigrants. The wonderful thing is that the children and grandchildren of these immigrants will, on average, do as well as the children and grandchildren of native-born Canadians.

Some studies also suggest immigration and diversity have positive induced effects on society’s innovative capacity. But more studies are needed to validate these impacts more precisely. Greater population density also brings economies of scale. And, no, immigration does not increase crime, nor does it have a significant negative impact on wages, but it does negatively impact the wages of previous cohorts of immigrants.

It’s also true that immigrants help fill certain short-term labor shortages. However, they eventually create others, by increasing demand for education, health care, housing and so on. It’s the same with aging: immigrants age too, and are often joined by their parents. In the long term, therefore, immigration has little effect on the age of the population.

So, is immigration good or bad for our standard of living? Basically, immigration seems to have a slight negative effect on our standard of living in the short term (ignoring the wealth that diversity can bring) and a slightly positive impact in the long term. This conclusion is not dissimilar to those reached in the research paper by economist Pierre Fortin for the Ministère de l’Immigration, de la Francisation et de l’Intégration du Québec, or in the article by W. Craig Riddell, Christopher Worswick and David A. Green, published in Policy Options.

The social network effect

We can thank our support systems – including the education system – for these results which are, all in all, quite good. It is thanks to these structures that immigrants succeed relatively well in integrating economically. Successful integration and gradual acculturation also ensure that the social cohesion necessary for the integration of future cohorts of immigrants is maintained.

Research shows that people have little trust in people who are different from them, but that this trust increases as they get to know them. To get to know them, however, they need to speak the same language. Learning the common language, a particularly important topic in Quebec, is essential for acculturation and economic integration. It’s the lack of resources for teaching French, not the unwillingness of new immigrants, that often explains the difficulties in communicating in French.

It is therefore essential that any increase in the number of immigrants be accompanied by an exponential rise in the resources allocated to their integration. Since the federal government wants to increase the number of immigrants by more than 10 per cent by 2025, the resources allocated to their integration must increase by much more than 10 per cent.

The first reason is that these resources already seem insufficient. The second is that the increase in the number of immigrants will necessarily involve accepting immigrants who, under current criteria, would not have been admitted. In other words, additional immigrants have profiles that make their integration more difficult, which means that their integration – all other things being equal – will require more resources. Failure to do so will tip the balance of impacts towards the negative.

It’s not about the money

Given these integration costs and relatively mixed or uncertain economic benefits, even when integration goes well, why then accept immigrants? Indeed, all the evidence suggests that the greatest beneficiaries are the immigrants themselves, and less so the society that welcomes them.

We must therefore welcome immigrants simply for humanitarian reasons, and stop thinking that immigration is the solution or the cause of our problems. Consequently, Ottawa must change the way it presents immigration to Canadians.

But before we praise our humanitarianism too highly, we must remember that immigration impoverishes the countries of origin of immigrants, often robbing them of their best and brightest. These people would surely have preferred to stay in their own countries if conditions had been better. The solution to really helping them, and slowing the flow of migration, is to limit climate change and help these countries develop better institutions.

But we don’t really know how to do that. The disastrous experiences in Iraq and Afghanistan are striking examples of our inability to build institutions. Yet this is where we should be focusing our research and international cooperation, because it’s here that the real solution to migration problems lies.

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This article first appeared on Policy Options and is republished here under a Creative Commons license.