Impact of immigrant workers on a regional labour market

Abstract

This article analyses the ability of a regional labour market to absorb growing flows of immigrant workers with declining levels of skills in relatively high unemployment times. In the short-run, unemployment increases with larger immigration flows, however, in the longer run, unemployment is permanently lowered. The level as well as the composition of skills of immigrant workers matter. Increasing the discrepancy between the skill distribution of immigrants and that of the existing workforce is desirable to mitigate some of the adverse effects on unemployment in the short run as both types of labour appear to be complement. Strengthening the existing screening system for immigrant candidates is then a possibility.

Acknowledgements

This article was written when the author was working for the Canadian Centre of Excellence for Research on Immigration and Integration in the Metropolis (RIIM) at Simon Fraser University, Burnaby, Canada. This article does not necessarily reflect the views of the ILO.

Notes

¹ In 1986, immigrants represented 48% of the BC population in 1986 while they were 45% and 38% in Quebec and Ontario (Canada Yearbook, 1994).

² The results are: ADF(u) = −2.72, DW(u) = 0.20; ADF(im) = −0.43, DW(im) = 0.16; ADF(lf) = −1.64, DW(lf) = 1.52; ADF(w) = −0.66, DW(w) = 0.35.

³ This is consistent with the argument that immigrants create more jobs than they occupy (Simon, 1989; Altonji and Card, 1991).

⁴ This result confirms that, immigrants are likely to be complements with local workers as less skill likeliness (match increases) lowers unemployment.