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1. Economic Domain

The disciplines of economics, demography, sociology, and urban studies have generated research that bears on economic consequences and implications of immigration, directly and indirectly. Some of the more technical economic items were addressed in the economics disciplinary synopsis presented above.

Very little research has used the city as the unit of analysis, either for case studies or comparative analysis. Relatively little quantitative research has disaggregated the immigrant category beyond the inclusive category of" visible minority" as distinct from subgroups ( e.g. South Asia ) or single country immigrants ( e.g. Jamaica ). Very little economic research has distinguished among the various administrative categories of immigrants, and NO research has focused on the economic performance of (adult) children of immigrants.

What is known? Immigrants to Canada in recent years have on average matched or exceeded Canadian born levels of educational attainment, in English Canada as well as in Quebec. Those from the earlier period up until the 1970s managed to catch up to the income levels of the Canadian born fairly rapidly. Immigrants have also compared well in terms of labour force participation and unemployment. But in recent years, it seems that the relative human capital advantages of immigrants have levelled off and they have taken longer to catch up, if they will, to the Canadian born in terms of income. The problem may be caused in part by discrimination. For example, analysis of 1986 data shows that particular visible minority immigrants, especially blacks and Asians, earned incomes lower than that merited by their endowments. The disadvantage was reduced for the Canadian born.

But overall immigrants compare well with the Canadian born, and overall immigration as a whole has had, in a macro sense, a small but positive impact on Canadian economic performance. Immigrants also do well in rates of home ownership, in Quebec as in the rest of Canada, with the exception of some visible minority groups arriving after 1971. But there is no information on the general impact of immigration on housing markets, or on the quality of the housing, whether owned or rented, in which immigrants find themselves.

There is substantial variation in the profile of immigrants to Canada, in terms of socio-economic attributes. This is unlike the European case, in which immigrants are concentrated largely in the lower socio-economic strata. In Canada, while some immigrants have done well, others are concentrated in slower growth industries. But with the exception of some immigrant women, there is comparatively little labour market segmentation for the ensemble of the foreign born, compared to European countries. (Though there are specific Canadian ethnic niches and enclaves.) What this has meant is that in Canada immigrants over all have caused relatively little resentment or envy -- with the possible exception of recent wealthy Chinese immigrants -- and also have minimized the degree of ghettoization.

The remarkable earlier success of immigrants who came to Canada into the 1970s, including a large number of visible minorities, may have been due to the relatively buoyant post war economy. In addition, the fact that the visible minorities at that time were fewer in number within the immigration cohorts, and also in the country as a whole, may have dampened expressions of racism.

Among the reasons offered for the narrowing of the earlier immigrant advantages among recent cohorts is that the human capital of immigrants, on average, may have decreased relative to that of the Canadian born. Immigration has become less selective. In addition, the economy is allegedly less expansive in recent years than in earlier periods. Seniority as a determinant of incomes may favour the Canadian born increasingly, and of course, discrimination in its various forms may be more of a problem to the more recent non-European immigrants. Thus we find the foreign born representation among low income Canadians higher in 1986 than in 1981 or 1971.

Yet despite the consensus that immigration has played a positive, if perhaps modest, role in generating wealth, and that immigrants are not a drain on the public purse, one question has not been studied: do the economic benefits of immigration flow to the native born, or do they accrue only or mainly to the immigrants?

Immigrant economic achievements have occurred despite major obstacles. Immigrants suffer from unfair accreditation practices in Quebec as in English Canada, a subject which requires further detailed study. Some immigrant women in particular suffer a number of handicaps in the labour market, relative to Canadian born women. This is particularly the case for immigrant women working in low wage sectors, such as the garment industry, or in the "informal" sector. The movement of light manufacturing to the suburbs also harms low income women, who may be less mobile. In addition, the entry of some women from traditional backgrounds into paid labour often does not lead to commensurate gains in their social status. Finally highly educated women immigrants may suffer doubly, both from devaluing their credentials and also as a result of family investment strategies which emphasize the role of the male earner at the expense of the woman. The latter possibility remains to be firmly established.

Visible minority immigrants seem to be underrepresented in the Canadian public service, notably at the higher levels. Indeed the government record for hiring visible minorities may be worse than those of government regulated industries, such as banks. In Quebec, the underemployment of immigrants (allophones) in both the provincial and municipal public services has been a longstanding fact. Employment equity efforts have apparently not been terribly successful. In Quebec this is largely because the state has evolved as a major hiring source for the old stock francophone majority, with the anglophones and allophones based in the commercial sector.

Given that certain immigrant minorities, notably certain visible minority groups, may be under-represented in desirable educational and occupational categories, the reviews did not contain studies of the efficacy of employment equity initiatives for immigrants.

There is no consensus on the economic impact of ethnic enclaves, or the enclave economy. One tradition focusing on labour market segmentation sees negative impacts, influenced by dual labour market theory. Jobs available in the ethnic enclave economy accordingly must be inferior to those available in the primary sector. Economic benefits are seen to flow mainly to entrepreneurs rather than to (underpaid) ethnic workers. Another perspective would see ethnic economic enclaves and ethnic niches as creative and adaptive responses. Moreover, these may in the future link up with international diasporic communities.

In any case, it is clear that immigrants continue to fill specific economic and occupational niches (as in the past) in Canadian urban centres. Some of these may be low status, as employment in small family businesses, as office cleaners, taxi drivers, restaurant workers, gardeners, etc. But one must note that immigrants are also over-represented in some areas of scientific research and hi tech occupations, a subject which has not been researched. In addition immigrants are over-represented among the self-employed, (well before the investor or entrepreneur immigrant class) though it might be of interest to compare the performance of immigrant entrepreneurs with that of the native born. There may also be particular obstacles facing immigrant entrepreneurs (e.g. access to credit). In general, studies are needed to resolve the issue of advantages or disadvantages to both immigrants and the host society of this type of segmentation. As indicated, there is evidence of concentration of some immigrants, notably immigrant women, in "soft" low wage sectors.

No scientific studies were cited, and none may exist, on the role of immigrants specifically in the informal sector, or underground economy as domestics or caregivers, as tradesmen, or as unpaid workers in family businesses.

No studies were cited of the impact of immigration on the production and consumption of ethnic cultural consumer goods, whether high culture or popular culture (e.g. ethnic restaurants). While the economics review felt this omission valid for that discipline, there is yet much to be studied. Enclave economies would contribute to the creation of both a demand and supply for such goods. There was no literature reviewed on the impact on tourism in Canadian cities.

The relationship between immigration and the many dimensions of globalization, including the link of immigration with the international flow of capital, and trade patterns, has not been researched. While some economic theory suggests that the movement of capital and indeed trade patterns can take place independently of the movement of people, it is not clear if this is always the empirical case (One thinks of the example of Chinese economic involvement in British Columbia). Government (unpublished) evaluations of the investor programmes cannot answer that particular question. While evaluations of those programs are often favourable, some economists would argue that such investments are not truly incremental, and that immigration does not thereby "create" more entrepreneurship.

Finally, there has been little work linking the demographic and economic consequences of immigration (as opposed to population growth more generally). While economists argue that population size and growth are uncorrelated with economic performance, factors such as the dependency ratio may play a macro-economic role. Population growth fuelled though immigration may have different long term public policy and fiscal implications, than population growth fuelled by natural increase. For example population growth through immigration may have a differential impact on technological development and diffusion of innovations than growth through natural increase -- or no growth at all. While immigration can only compensate minimally for declining fertility, it can have a mitigating impact on the dependency ratio, and thus improve macro-economic outcomes.

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Last update on : 1998/02/24
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