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Self-Selection, Immigrant Public Finance Performance and Canadian Citizenship

Author

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  • DeVoretz, Don J.

    (Simon Fraser University)

  • Pivnenko, Sergiy

    (Simon Fraser University)

Abstract

This paper consists of two parts focusing on the immigrant’s decision to acquire Canadian citizenship, and her subsequent performance as a taxpayer and recipient of public finance transfers. Our results support the view that selectivity bias appears in Canadian immigrant citizenship decisions and varies by immigrant gender and source country groups. Our Oaxaca decomposition results demonstrated the importance of the human capital endowment in explaining selectivity corrected citizenship-non-citizenship earnings differences. Next, we confirmed the standard results that the naturalization decision is conditioned by the expected wage gain, level of education, marital status, age and presence of children. At the macro level, our study focused on the implications of Canadian citizenship for the lifetime public finance contributions by naturalized immigrants. All immigrants, regardless of their source country group and citizenship status, made a positive contribution to Canada’s treasury circa 1996 over their life cycle. Naturalized citizens from OECD countries contributed the largest public finance transfers exceeding the corresponding value for the Canadian-born by more than $14,000. In addition, naturalized citizens made higher net contributions than their non-citizen counterparts regardless of source country. The relatively poor public finance performance of non-citizens was explained by their lifetime low income and low tax payments.

Suggested Citation

  • DeVoretz, Don J. & Pivnenko, Sergiy, 2005. "Self-Selection, Immigrant Public Finance Performance and Canadian Citizenship," IZA Discussion Papers 1463, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1463
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    References listed on IDEAS

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    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
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    5. Abul F. M. Shamsuddin & Don J. DeVoretz, 1998. "Wealth Accumulation Of Canadian And Foreign‐Born Households In Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 515-533, December.
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    Cited by:

    1. Aga Szewczyk, 2016. "Polish Graduates and British Citizenship: Amplification of the Potential Mobility Dynamics beyond Europe," Mobilities, Taylor & Francis Journals, vol. 11(3), pages 362-381, July.
    2. DeVoretz, Don J., 2006. "The Economics of Citizenship: A Common Intellectual Ground for Social Scientists?," IZA Discussion Papers 2392, Institute of Labor Economics (IZA).
    3. Steinhardt, Max Friedrich, 2012. "Does citizenship matter? The economic impact of naturalizations in Germany," Labour Economics, Elsevier, vol. 19(6), pages 813-823.
    4. Fabio Mariani, 2013. "The political economy of naturalization," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(2), pages 656-688, May.
    5. Susan Brown & Jennifer Hook & Jennifer Glick, 2008. "Generational Differences in Cohabitation and Marriage in the US," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 27(5), pages 531-550, October.

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    More about this item

    Keywords

    immigration; public finance; Canada; citizenship;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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