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Selecting Economic Immigrants: An Actuarial Approach

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  • McHale, John
  • Rogers, Keith

Abstract

There is growing international interest in a Canadian-style points system for selecting economic immigrants. Although existing points systems have been influenced by the human capital literature, the findings have traditionally been incorporated in an ad hoc way. This paper explores a formal method for designing a points system based on a human capital earnings regression for predicting immigrant economic success. The method is implemented for Canada using the IMDB, a remarkable longitudinal database that combines information on immigrants’ characteristics at landing with their subsequent income performance as reported on tax returns. We demonstrate the feasibility of the method by developing an illustrative points system. We also explore how the selection system can be improved by incorporating additional information such as country-of origin characteristics and intended occupations. We discuss what our findings imply for the debate about the relative merits of points- and employment-based systems for selecting economic immigrants.

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Bibliographic Info

Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-64.

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Length: 35 pages
Date of creation: 28 Nov 2009
Date of revision: 28 Nov 2009
Handle: RePEc:ubc:clssrn:clsrn_admin-2009-64

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Web page: http://www.clsrn.econ.ubc.ca/

Related research

Keywords: Immigrant selection; Points system; Human capital; Earnings prediction;

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References

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  1. anonymous, 2006. "Monetary policy report to the Congress," Web Site 7, Board of Governors of the Federal Reserve System (U.S.).
  2. David E. Bloom & Gilles Grenier & Morley Gunderson, 1995. "The Changing Labour Market Position of Canadian Immigrants," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 987-1005, November.
  3. Charles Beach & Alan G. Green & Christopher Worswick, 2006. "Impacts of the Point System and Immigration Policy Levers on Skill Characteristics of Canadian Immigrants," Working Papers 1115, Queen's University, Department of Economics.
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  8. Aydemir, Abdurrahman, 2002. "Effects of Selection Criteria and Economic Opportunities on the Characteristics of Immigrants," Analytical Studies Branch Research Paper Series 2002182e, Statistics Canada, Analytical Studies Branch.
  9. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
  10. John McHale & Keith Rogers, 2009. "Optimal Design of an Immigration Points System," Working Papers 0146, National University of Ireland Galway, Department of Economics, revised 2009.
  11. Picot, Garnett Sweetman, Arthur, 2005. "The Deteriorating Economic Welfare of Immigrants and Possible Causes: Update 2005," Analytical Studies Branch Research Paper Series 2005262e, Statistics Canada, Analytical Studies Branch.
  12. Ana Ferrer & David A. Green & W. Craig Riddell, 2006. "The Effect of Literacy on Immigrant Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
  13. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
  14. anonymous, 2006. "Monetary policy report to the Congress," Web Site 6, Board of Governors of the Federal Reserve System (U.S.).
  15. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  16. Picot, Garnett Hou, Feng Coulombe, Simon, 2007. "Chronic Low Income and Low-income Dynamics Among Recent Immigrants," Analytical Studies Branch Research Paper Series 2007294e, Statistics Canada, Analytical Studies Branch.
  17. Jasso, Guillermina & Rosenzweig, Mark R., 2008. "Selection Criteria and the Skill Composition of Immigrants: A Comparative Analysis of Australian and U.S. Employment Immigration," IZA Discussion Papers 3564, Institute for the Study of Labor (IZA).
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