Cut immigration during recessions: study

Adrian Humphreys  Sep 1, 2011 – 6:00 AM ET | Last Updated: Aug 31, 2011 10:30 PM ET

Canada should reduce immigration during deep economic recession, say the authors of a detailed analysis of the earnings of immigrants over their first 10 years in the country that also touts the benefits of selecting newcomers based on earning potential.

Canada should emphasize skill-assessed immigrants because their earning power “consistently and substantially” out-performed other classes of newcomers, the study says.

Written by two Queen’s University professors and released by the Canadian Labour Market and Skills Researcher Network Wednesday, the study calls on policy makers to look closely at how rapidly immigrants are integrating into the Canadian labour market as the wage gap between immigrants and Canadian-born workers widens.

“In setting immigration policy and targets, it is important to know how well immigrants in these different admission categories have done, and which have produced better earnings outcomes,” say authors Charles Beach, professor of economics, and Michael Abbott, associate professor of economics.

They assessed the annual earnings over 10 years of immigrants who arrived in three different years: 1982, 1988 and 1994.

Immigrants enter Canada under different admission categories, each addressing a different objective, both altruistic and selfish — providing labour to help the economy, promoting family welfare through reunification and offering safe haven from war, persecution or natural disaster.

Across all of the landing cohorts, skill-assessed economic immigrants exceeded the average median earnings levels for all immigrants by 30 to 37% for men and by 39 to 56% for women, the authors found.

However, refugees showed the highest earnings growth rates, while those who arrived for reasons of family reunification had the lowest.

The study shows recessions have major negative effects on immigrants’ earnings levels, particularly men. The impact is seen by comparing immigrants arriving in 1988, who faced the early 1990s recession soon after settling, with those arriving in 1994, during the economic recovery. Regardless of which class the immigrant was admitted under, in troubled times, their earnings growth was lower.

“These results reflect on two aspects of Canadian immigration policy,” the authors say. “First, since skill-assessed, independent economic immigrants had substantially higher earnings levels throughout their first 10 post-landing years, Canada should continue to place heavy weight on skill-assessed immigrants.

“Recession appears to have had very marked and long-lasting scarring effects on the real earnings of immigrants,” the authors say. “Perhaps thought should be given to ways to reduce total immigrant admission levels when severe recessions hit.”

The report confirms what many have long suspected, said Sergio Karas, a Toronto immigration lawyer.

“Immigrants who come to Canada with prearranged employment become better integrated and more easily established than those in other immigration categories,” he said.

“The federal government and the provinces must give top priority to address the looming skilled-worker shortage and the entrepreneurial innovation deficit that threaten Canada’s economic future rather than wasting funds on programs that cater to politically driven goals.

“There is no point in bringing immigrants to Canada if they will be unable to find jobs,” Mr. Karas said.

The Canadian Council for Refugees, however, cautioned against assessing immigration to Canada only in dollars and cents. The different categories have differing goals.

“You can’t measure the success of the family reunification program by assessing their rates of earnings,” said Janet Dench, the council’s executive director. “We don’t protect refugees because we think it will be good for the economy — we do it to protect them from persecution.”

Ms. Dench said the government is already leaning too heavily toward skills-assessed, economic immigrants.

The study used data provided by Citizenship and Immigration Canada. The CLMSRN is a network of academic researchers studying the labour market funded through the Social Sciences and Humanities Research Council and Human Resources and Social Development Canada.

National Post

ahumphreys@nationalpost.com