Labour Market Matters - June 2013

Despite a history built on immigration, immigrants are among those who struggle the most in Canada. Recent research finds that the proportion of recent immigrants (in Canada for 5 years or less) who were in poverty has risen steadily from 24.6% in 1980 to 47% in 1995, before falling to 36% in 2005. Disturbingly, this increase in poverty for immigrants was occurring at the same time as poverty rates for the non-immigrant population was generally falling. At times when the ageing population is expected to impose a heavy fiscal burden through age-related programs like pensions and health care, immigration is often looked upon as a possible way to mitigate that burden. Immigration can also help break skilled labour shortages and production bottlenecks – which can expand job opportunities for domestic-born workers. Importing people through immigration to domestically produce goods and services can be a substitute to importing such goods and services from other countries. In a study entitled “Macroeconomic Impacts of Canadian Immigration: Results from a Macro-model†(CLSRN Working Paper no. 106) by CLSRN affiliates Peter Dungan (University of Toronto), Tony Fang (York University), and Morley Gunderson (University of Toronto) find that additional immigration is likely to have a positive impact on the Canadian labour market and economy in general – with positive impacts on factors such as real GDP and GDP per capita, aggregate demand, investment, productivity, and government expenditures, taxes and especially net government balances, with essentially no impact on unemployment. Older immigrants in Canada often struggle in the labour market compared to both their native-born peers and their younger counterparts. In addition to encountering difficulties with labour market issues related to assimilation and credential recognition, immigrants as a group tend to have difficulty gaining the needed years of contribution to both public and private pension plans due to the fact that a significant part of their working careers may have occurred outside of Canada. When an immigrant arrives in Canada after the age of 50, these problems are accentuated. While the socio-economic welfare of older immigrants is concerning, there is evidence that the effects of the lower incomes on the welfare of older immigrants are mitigated to a certain extent through co-residency, presumably with their younger relatives already resident in Canada. In a CLSRN study entitled “Retirement Incomes, Labour Supply and Co-residency Decisions of Older Immigrants in Canada: 1991-2006†(CLSRN Working Paper no. 116) Ted McDonald (University of New Brunswick) and Christopher Worswick (Carleton University) examine the extent to which older immigrants are able to support themselves in their retirement years, as well as analyze the extent to which older immigrants are more (or less) likely to reside with other family members relative to the Canadian-born as a way of diminishing the effects of low income on consumption.