Sweden and Canada Immigration Comparison

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IZA Policy Paper No. 25
PO LI CY PAPE R S E R I E S

Canadian Immigration Policy and Immigrant Economic Outcomes: Why the Differences in Outcomes between Sweden and Canada? Garnett Picot Arthur Sweetman

March 2011

Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor

Canadian Immigration Policy and Immigrant Economic Outcomes: Why the Differences in Outcomes between Sweden and Canada? Garnett Picot
Queen’s University

Arthur Sweetman
McMaster University and IZA

Policy Paper No. 25 March 2011

IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: iza@iza.org

The IZA Policy Paper Series publishes work by IZA staff and network members with immediate relevance for policymakers. Any opinions and views on policy expressed are those of the author(s) and not necessarily those of IZA. The papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the corresponding author.

IZA Policy Paper No. 25 March 2011

Canadian Immigration Policy and Immigrant Economic Outcomes: Why the Differences in Outcomes between Sweden and Canada? * Immigrants to Canada enjoy labour market outcomes that are more favourable than those for their counterparts in Sweden. In an effort to understand these gaps, Canada’s immigration policy and outcomes are contrasted to the Swedish immigration experience. The nature of immigration and structural differences involving the domestic labour markets are hypothesized to provide plausible explanations for at least some of the gap. Additionally, there are dynamic issues related to, for instance, the timing of immigrant entry with respect to the business cycle, and changes in the rates of immigration flows, that may have some impact on labour market outcomes and explain some short- to medium-term aspects of the gap in outcomes. On the other hand, common trends are also observed; both unemployment and earnings outcomes among entering immigrants have deteriorated significantly in Canada since the 1980s, as they have in many western countries including Sweden.

JEL Classification: Keywords:

J61, J68

immigration, cross-country differences, Canada, Sweden

Corresponding author: Arthur Sweetman Department of Economics Kenneth Taylor Hall, Rm 407 McMaster University 1280 Main Street West Hamilton, Ontario L8S 4M4 Canada E-mail: arthur.sweetman@mcmaster.ca

We would like to thank Feng Hou of Statistics Canada for valuable input in the preparation of this paper, and Georges Lemaitre and Elizabeth Ruddick for comments on the manuscript. This paper is being published in Swedish as “Skillnaden i sysselsättningsgapet mellan Kanada och Sverige”, i Hojem, Petter & Martin Ådahl (red.), Kanadamodellen. Där invandring leder till jobb, Stockholm: FORES, pp. 67-111.

*

Introduction Much can be learned regarding immigration policy by studying cross-country differences in immigrant economic outcomes and their causes. Employment outcomes among immigrants to Canada tend to be superior to those of their counterparts in Sweden. However, the nature of immigration to the two countries differs and other structural differences involving the domestic labour market provide plausible explanations for at least some of the gap. Additionally, there are dynamic issues related to, for instance, the timing of immigrant entry with respect to the business cycle, and changes in the rates of immigration flows, that may have some impact on labour market outcomes and explain some short- to medium-term aspects of the gap in outcomes across countries. On the other hand, both unemployment and earnings outcomes among entering immigrants have deteriorated significantly in Canada since the 1980s, as they have in many western countries including Sweden. This paper describes the context of Canadian immigration and immigrants`...
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