Labour Market Matters - June 2014

According to the standard economic model of crime, which assumes that individuals are rational decisions makers who consider the opportunity cost of crime and take into account the possibility of getting caught and punished; the concern that immigration can cause increases in crime is warranted, considering the fact that there is much empirical evidence that suggest the labour market does not provide as many good opportunities to immigrants than to native born. Indeed, previous studies have found that not only do new immigrants in Canada earn less than native-born workers, but this entry-earning disadvantage has been increasing since the 1990s.1 A study by CLSRN affiliate Haimin Zhang (University of British Columbia) entitled “Immigration and Crime: Evidence from Canada†(CLSRN Working Paper no. 135) analyses the relationship between immigration and crime, and establishes causal evidence that increasing immigrant population in Canada is associated with decreasing in crime rates. Since Canada has a point system that targets skilled immigrants to reduce the labor shortages in specific markets, it could be expected that a selective immigration policy of this nature, may bring more “complementary†new immigrant workers into Canada rather than a stream of “substitute†foreign labor that competes with native-born workers for the existing jobs; however, if a “substitution†situation is the reality immigration can lead to out-migration of the non-immigrant population from a community in the short run. A study by CLSRN affiliate Yigit Aydede (Saint Mary’s University) entitled “Immigration and Location Choices of Native-Born Workers in Canada†(CLSRN Working Paper no. 130) investigates how location choices of native-born workers can be influenced by the conditions in both the potential destinations and the departure regions as well as develop a better understanding about a possible crowding-out effect of immigration in local labor markets in Canada. Unlike other studies, the study develops industry/occupation specific immigration clustering index for local labour markets and finds that increasing immigration concentration in the mover’s industry reduces a destination’s desirability against alternative locations, and that younger workers are more likely than older workers to move when faced with immigration substitution intensity in their industries and locations.