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Foreign Scientists and Engineers and Economic Growth in Canadian Labor Markets

Author

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  • Peri, Giovanni

    () (University of California, Davis)

  • Shih, Kevin Y.

    () (Queens College, CUNY)

Abstract

In this paper we analyze the impact of foreign-born workers in the fields of Science, Technology, Engineering and Math (STEM) on employment and wages in Canadian geographical areas during the period 1991-2006. Canadian policies select immigrants with a strong emphasis on high educational attainment. Moreover the foreign-born constitute a third of the Canadian population making Canada a very good case to analyze the effect of foreign-STEM workers on the local economy. We use the dispersion of immigrants by nationality across 17 geographical areas in 1981 to predict the supply-driven increase in foreign Scientists and Engineers during the period 1991-2006. Then we analyze their impact on the employment and wages of college and non-college educated Canadian-born (native) workers. We find significant positive effects on the wages and (to a lesser extent) employment of college educated natives. We also find a smaller positive effect on the wages and employment of native workers with very low levels of education (i.e. those with no high school degree). This implies a positive productivity effect of foreign-STEM workers in Canada, and also a college bias in their contribution to productivity growth. Compared to the effect of foreign Scientists and Engineers in US cities, the Canadian results show similar effects on wages of college educated and at least partial evidence of a positive diffusion of the effect to non-college educated, which was not present in the US.

Suggested Citation

  • Peri, Giovanni & Shih, Kevin Y., 2013. "Foreign Scientists and Engineers and Economic Growth in Canadian Labor Markets," IZA Discussion Papers 7367, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7367
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. E Latif, 2015. "Immigration and Housing Rents in Canada: A Panel Data Analysis," Economic Issues Journal Articles, Economic Issues, vol. 20(1), pages 91-108, March.
    2. Andrew Sharpe, 2015. "Ontario's Productivity Performance, 2000-2012: A Detailed Analysis," CSLS Research Reports 2015-04, Centre for the Study of Living Standards.
    3. Don Drummond & Evan Capeluck & Matthew Calver, 2015. "The Key Challenge for Canadian Public Policy: Generating Inclusive and Sustainable Economic Growth," CSLS Research Reports 2015-11, Centre for the Study of Living Standards.
    4. David C Maré & Trinh Le & Richard Fabling & Nathan Chappell, 2017. "Productivity and the Allocation of Skills," Working Papers 17_04, Motu Economic and Public Policy Research.
    5. Chad Sparber, 2015. "Building a Better H-1B Program," CReAM Discussion Paper Series 1513, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

    More about this item

    Keywords

    STEM workers; foreign-born; Canadian-born; college-educated; wage; employment;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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