Lecture5 - Immigration II Lecture 5, February 7, 2012...

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Immigration II Lecture 5, February 7, 2012
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Announcements Sketch of the next couple of Friday classes: February 10: Term Paper Session Miscellaneous (e.g., Peer Scholar, Q&A, etc.) February 17: Term Paper Session Eveline Houtman, Coordinator of Library Instruction Term Paper: First draft due Friday March 2, 10:00am. 3.5 weeks… And don’t forget to work on the problems. 1
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Outline for today Review The impact of immigration on the labour market Theory Evidence (mostly not review) Immigrant Performance Defining immigrant assimilation Estimation of the “assimilation profile” Cross-section Cohort effects Quasi-panel Summary of evidence Immigrant credentials 2
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Review: The Impact of Immigration From a policy perspective, one of the most important questions is what impact immigration has on outcomes of the “native-born” (or other incumbents). Also interesting to know how well labour markets adjust to “shocks” In principle, it is easy to model the impact of immigration on the labour market. “Supply and Demand” What is the market? National? City? By occupation or skill? A combination of location and skill? For a given labour market, model the impact of immigration as a shift in supply. 3
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Impact on supply only 4 Wage Employment D S S’ Δ IMM S W 0 W 1 E 0 E 1
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Impact on supply and demand 5 Wage Employment D S S’ Δ IMM S W 0 , W 1 E 0 E 1 D’ Δ IMM D
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Review: Why might immigration affect demand? Immigrants themselves my increase local demand for goods and services; Immigrants may improve trade ties with source countries May attract capital to the market With “reasonable” supply and demand functions, what is the likely effect of immigration? Solve for equilibrium wages and employment Conduct comparative statics “Calibrate” the model with reasonable elasticities to conduct thought experiments. We discussed how to do this algebraically, deriving strong predictions about the impact of immigration on employment and wages. 6
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Evidence: Introduction The supply and demand model suggested that several factors matter: Effect of immigration on the supply or demand curve of a particular labour market (e.g., skilled or unskilled); Relative magnitudes of supply and demand elasticities A useful framework to conduct thought experiments. But what about “hard” evidence? What would the Canadian labour market look like without immigration? As always, the difficulty is in constructing “counterfactuals.” Compare now to 10 years ago? Compare Toronto to Montreal? 7
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Potential Approaches A simple approach would be to estimate the following specification: For some labour market outcome y j , and immigration measure, I j .
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This note was uploaded on 03/30/2012 for the course ECO 339 taught by Professor Mbaker during the Spring '11 term at University of Toronto- Toronto.

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Lecture5 - Immigration II Lecture 5, February 7, 2012...

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