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A Critique of “Macroeconomic Impacts of Canadian Immigration… Using the Focus Model” (Dungan, Fang and Gunderson, 2010)

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  • Grady, Patrick

Abstract

This paper provides a critique of an analysis of the macroeconomic impact of a 100,000 per year increase in immigration over a ten year period beginning in 2012. It was prepared by Peter Dungan, Tony Fang and Morley Gunderson using the FOCUS macroeconomic model of the University of Toronto Institute for Policy Analysis. The methodology relies on microeconomic information, much of which is dated, from earlier studies of the impact of immigration in Canada and other countries to gauge the microeconomic impact that is used to shock the various exogenous variables and equations of the model. As is often the case in such studies, the model overrides are the most important determinants of the simulation results as most, if not all, the important impacts of immigration are not built into the structure of the model. This critique provides specific examples of where this is the case and presents a case that the model results substantially overestimate the positive impact of increased immigration.

Suggested Citation

  • Grady, Patrick, 2011. "A Critique of “Macroeconomic Impacts of Canadian Immigration… Using the Focus Model” (Dungan, Fang and Gunderson, 2010)," MPRA Paper 65454, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65454
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    References listed on IDEAS

    as
    1. Grubel, Herbert & Grady, Patrick, 2011. "Immigration and the Canadian Welfare State 2011," MPRA Paper 31109, University Library of Munich, Germany.
    2. Abdurrahman Aydemir & George J. Borjas, 2006. "A Comparative Analysis of the Labor Market Impact of International Migration: Canada, Mexico, and the United States," NBER Working Papers 12327, National Bureau of Economic Research, Inc.
    3. Ather H. Akbari, 1989. "Do Third World Immigrants Impose a Cost on Canadian Public Treasury?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(4), pages 961-970.
    4. Ather H. Akbari, 1989. "The Benefits of Immigrants to Canada: Evidence on Tax and Public Services," Canadian Public Policy, University of Toronto Press, vol. 15(4), pages 424-435, December.
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    More about this item

    Keywords

    macroeconomic impact of immigration; macroeconomic models;

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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