Migration and Emigration in Canada until 2003

Della Savia, Roy

Migration and Emigration in Canada until 2003

Summary

This research discusses the relationship between the migration of skilled professional and managerial workers from Canada to the United States, the so-called “brain drain”, and seeks to determine if and how the Canada–U.S. Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA) may have affected bilateral flows of permanent and non-permanent immigrants between the two countries.
Classical economic theory suggests that trade and factor movements are substitutes, so that freer trade between Canada and the United States could be expected to reduce incentives for bilateral migration. On the other hand, the labor demands of multinational corporations in the emerging global marketplace require a greater degree of worker mobility than has heretofore existed. The research reviews available historic and longitudinal evidence related to political, social and economic effects of the FTA and the NAFTA.

Excerpt

Limitations and Validity ... 134

Additional Data Sources ... 139

Findings... 147

Age Composition ... 151

Determinants of Immigration ... 153

Determinants of Departures ... 154

Determinants of Arrival ... 155

Chapter 4: ANALYSIS ... 165

Evaluating the Data Sources ... 165

The NAFTA Connection ... 185

Other Considerations ... 194

Chapter 5: SUMMARY AND CONCLUSIONS ... 207

NAFTA's Role ... 216

References ... 230

Appendices ... 246

LIST OF ACRONYMS

CPS Current Population Survey

FDI Foreign Direct Investment

FTA The Canada-U.S. Free Trade Agreement

GDP Gross Domestic Product

NAFTA The North American Free Trade Agreement

OECD Organisation for Economic Cooperation and Development

RRC Reverse Record Check

UBC University of British Columbia

Chapter 1: INTRODUCTION

The Problem

The rapid growth of international trade in Canada, in the wake of expansion

of freer trade throughout the world over the past two decades, have made

improved competitiveness a crucial objective for the Canadian government at all

levels. In this context, a growing concern for many Canadians is that skilled

workers with higher education credentials (knowledge workers) are moving south

to the United States in increasing numbers. In fact, increased globalization and

the emergence of knowledge- based economies have greatly increased the

demand for skilled workers throughout the world. Canada is no exception, and the

Canadian government is investing heavily in providing skills for the future work

force. The retention of these workers is vital to the global success of Canadian

firms. Under conditions of increasing international demand for skills and growing

economic linkage between Canada and the United States, there is pressure for

mobile workers to take advantage of other opportunities. Indeed, the growing

concern is that Canada is currently losing key segments of its highly educated and

productive workforce to the United States, the issue of the so-called "brain drain."

This issue has received extensive media coverage in recent years. Anecdotal

evidence seems to point to a large exodus of skilled labor from Canada, but the

available data give mixed messages leading to a wide range of opinion about the

general subject. For example, in studies sponsored by the C.D. Howe institute in

1995, it is suggested that there is a growing shortage of skilled labor in Canada,

and that graduates who moved to the U.S. are more likely to have Master's or Ph.

D's and more likely in the health, engineering, or mathematics fields. On the other

hand, in seeking to substantiate the existence of a brain drain, Roy, Henson and

Lavoie (1996) stated that they could draw no conclusions about a shortage of

skilled workers in Canada because so little was known about current or future skills

imbalances. They also noted that employer-based surveys do not provide reliable

estimates of market shortage situations. Gingras and Roy (1998) also concluded

that there was no evidence of a broad-based shortage of skills.

Nevertheless, many observers have concluded that the preponderance of

evidence leads to the general conclusion that during the 1990s Canada suffered a

net loss of skilled workers to the United States in several economically important

occupations, although the numbers involved have remained small in an historical

sense and small relative to the supply of workers in these occupations. Compared

with the general population, however, emigrants are over-represented among

better-educated, higher-income earners and individuals of prime working age.

Further, there was an upward trend during the 1990s in the number of people

leaving Canada for the United States and other countries.

In any case, there are three issues central to the debate. How many people

are moving to the U.S? Are they among the most highly skilled workers? And, why

are they leaving Canada? Moreover, what is the bottom line in regard to the

socioeconomic situation of Canada if there is such a "brain-drain?" In the latter

category, a steady loss of highly educated and skilled workers is perceived by

some observers to present a long-term problem for prospects of economic

development and international business competition for Canada. This concern

has been heightened by the view that a growing shortfall of human capital as a

result of emigration is no longer being fully offset by a traditional immigration inflow

into Canada nor by any other effective measures which could help to staunch the

outward flow. Followed to a logical conclusion then, this line of thinking, and some

ongoing confusion about what research data into the problem really means,

suggests that there are as yet undetermined social dynamics at play which

foreshadow a time when the a outflow of human capital will severely impact the

Canadian economy at all levels.

To the casual observer, the two most salient factors that tend to draw

Canada's knowledge workers south are more and better job opportunities, and

higher wages. First, the larger U.S. economy offers more opportunities in key

knowledge sectors, where Canadians may find work better-suited to their

qualifications. When conditions are not right at home, skilled people begin to

consider moving elsewhere to ply their trade. In the case of health professions in

Canada, for example, the outflow of workers to the United States reflects

restructuring of the Canadian health care system and slow employment growth for

health professionals in Canada. Additionally, the greater availability of research

funding and more advanced research facilities in the United States may also be

enticing Canadian scientists and engineers to head south. Thus, the concern that

Canada is currently losing key segments of its highly educated and productive

workforce to the United States is, in part at least, a realistic and valid one.

Moreover, available evidence suggests that those workers who are emigrating are

some of Canada's most qualified workers. Finally, although the two most obvious

factors that tend to draw Canadian workers south are more and better job

opportunities, and higher wages, higher Canadian taxes also apparently play a role

for recent graduates and entry-level positions, and have a even larger effect on

high-income positions. Are these the only factors, however? And if so, why are

they perceived as being more influential today than they have been in the past?

In terms of economic determinants, one striking feature is prominent from

statistical studies that relate to the brain drain phenomenon, and this is the extent

to which interprovincial and interstate mobility of labor in Canada is many times

higher than that between countries. Another interesting finding extrapolated from

the data appears to be that those born in Canada are more willing to move, either

interprovincially or internationally, than are those born in the United States.

Helliwell (1998) provided a study in which interprovincial, interstate and

Canada-U.S. population mobility was estimated on the basis of data from the

Canadian and U.S. censuses. It was noted that in the Canadian census

respondents report their current province of residence and their province or country

of birth. The U.S. census collects similar data for state of residence and states or

countries of birth. For each of the two countries, it is therefore possible to estimate

the relative likelihood of cumulative internal and international migration, after

adjusting for the separate influences of distance, size and per capita incomes as

determinants of migration. Results showed that for both countries there is a

sharply higher probability that a migrant to a state or province comes from another

part of the same country rather than from the other country. Based on all

cumulative migration up to the 1990-91censuses in the two countries, a resident

of a Canadian province was 100 times more likely to have come from another

province than from the United States, after adjusting for economic size and

distance. The corresponding results for residents of the United States shows them

to be seven times more likely to have migrated from another state than from a

Canadian province of similar economic size and distance. This suggests that

internal migration is much more likely than international migration, and also shows

that Canadians have traditionally been much more likely to migrate to the United

States than vice versa.

One explanation for the greater likelihood of finding Canadian-born in the

United States is that the Canadian-born are more mobile than the U.S.-born,

whether moving within their country of birth or moving to the other country. Another

reason for the greater flows of southbound migrants is that the 49th parallel

provides a membrane through which northbound information travels much more

readily than southbound flows. The average Canadian has all the U.S. channels

on his or her TV set, along with much U.S. information and programming on the

Canadian channels. In the U.S. media, and on the U.S. cable systems, there is

almost nothing about Canada. Thus, Canadians regard the United States as

known territory, while most residents of the United States have no reason to ever

think what it might mean to live in Canada. Since information and familiarity spur

migration, this asymmetry of information may help to explain migration patterns.

The greater familiarity of Canadians with the United States and its job

opportunities may also provide part of the reason why Canadian migrants to the

United States earn incomes that exceed the U.S. average by more than is true for

U.S. migrants to Canada. For both countries, however, international migration

remains far less likely than internal migration. Among those who do migrate,

whether domestically or abroad, there is a preponderance of the highly educated,

partly because they are more likely to have skills in demand, but also because they

are more likely to have contacts in and knowledge about the possible places to

move.

To the extent that migration of the highly skilled may be triggered by

different factors, survey data suggests that job opportunities and challenges are

even more important for the highly educated. It is also true that for many such

workers, particularly in health care, education, and government-supported

fundamental research, the 1990s have seen large cuts in government spending

induced by budget pressures. As federal and provincial finances are returning to

balance, both levels of government are starting to rebuild their diminished

capacities to provide health care, higher education and research. In addition to this

likely restoration of financial support, job opportunities for new entrants to the

knowledge professions, especially those employed by universities, will be

enhanced by the large bulge of retirements in the next ten years. It is noteworthy

that the coming retirement surge is the echo of the massive hiring by universities

in the 1970s (larger in Canada than in the United States), which itself was largely

responsible for ending the earlier and much larger exodus of highly educated

Canadians in the 1960s.

Purpose of the Study

This paper examines available empirical evidence about the loss of

knowledge workers from Canada to the United States, and about the gain of

knowledge workers in Canada from the rest of the world. The evidence available

leads to the general conclusion that during the 1990s Canada suffered a net loss

of skilled workers to the United States in several economically important

occupations, although the numbers involved have remained small in an historical

sense and small relative to the supply of workers in these occupations. Compared

with the general population, however, emigrants are over- represented among

better-educated, higher-income earners and individuals of prime working age.

Further, there was an upward trend during the 1990s in the total numbers of people

leaving Canada for the United States and other countries.

However, while losses of highly skilled workers to the United States

accelerated during the 1990s, so too did the influx of highly skilled workers into

Canada from the rest of the world. This is particularly true of high-technology

industries where immigrant workers entering Canada outnumber the outflow to the

United States by a wide margin. Indeed, immigrant high-technology workers

represented an important part of employment expansion in these industries in the

1990s. Evidence also suggests that the labor market does not discern a quality

difference between immigrant and native-born high-technology workers, as

estimated lifetime earnings of immigrant versus Canadian-born computer

scientists are nearly identical. Emigrants to the United States are more than twice

as likely to hold a university degree than are immigrants to Canada. However,

because of the overall greater number of immigrants, there are four times as many

university graduates entering Canada from the rest of the world as there are

university degree holders of all levels leaving Canada for the United States. The

number of master's and doctoral graduates alone entering Canada from the rest

of the world is equal to the number of university graduates at all levels leaving

Canada for the United States.

The real question becomes then, just what primary dynamics are and could

be at play when it comes to prompting Canada's knowledge workers to move

south? We can rightly say that higher wages, better opportunities and lower taxes

are always of interest to highly skilled workers, or for that matter, all workers, but

what is really at the heart of the current trend of movement among Canada's skilled

workforce? It is the hypothesis of this study that the primary dynamic contributing

to increased emigration southwards of Canada's most skilled and educated

workers is the introduction of the North American Free Trade Agreement of 1994

(NAFTA), and that the movement southward has become much more prominent

since its implementation. The corollary to this hypothesis is that this increase in

emigration is not being offset by other factors, including the immigration of skilled

workers from abroad.

In the late 1980s and early 1990s, a massive wave of plant closures and

layoffs hit Canada. Tens of thousands of workers permanently lost what had once

been secure and decent jobs. NAFTA has added to the high Canadian

unemployment rate and job insecurity. Similar to the United States, after NAFTA,

Canada lost jobs as its trade deficit with Mexico grew from $2.9 billion to $4.3

billion. Also, like the United States, Canadian workers' pay has not kept up with

inflation and wages have been much slower to rise when compared to gains in

worker productivity.

NAFTA has also contributed to undermining Canada's strong social

programs, particularly unemployment insurance and national health care. The

Canadian Manufacturers Association and the Canadian Chamber of Commerce

are trying to cut Canada's social programs while blaming cuts on international

competition. Rather than maintain Canada's "high road" social safety net, they

want to reduce social welfare benefits by forcing Canadian workers to lower their

expectations.

In truth, however, some critics say that NAFTA has actually put the need for

Canadian economic development and expansion on a fast track. The normal push

and pull factors that determine mobility for Canada's knowledge workers should

therefore be equally heightened so long as there are differences in regional

equality, taxes, employment opportunities and remuneration. The connection

between the two, however, is not entirely clear, nor is the long-term prognosis for

how current emigration/immigration differentials do or will impact the Canadian

economy. Accordingly, this study examines the depth of the "brain drain" problem

as it relates to NAFTA and seeks to verify or dismiss the contention that NAFTA

has had an overall negative effect on the outflow of human capital from Canada.

Interestingly, in this respect, in order to promote trade in goods and

services, Chapter 16 of the NAFTA facilitates the cross-border movement of

business persons who are citizens of member countries to the NAFTA. The

original idea was to ease restrictions on business travel back and forth between

participating countries, but this easing of restrictions may also have had the effect

of increasing across-border migration of workers.

Traditionally, most people leaving Canada for the United States applied for

permanent immigration. Temporary visas had limitations, such as restrictions on

the number of renewals possible. However, under NAFTA, Canadian workers in

qualifying professional occupations can readily gain entry into the United States,

needing only to show proof of their qualifications and a job offer from an employer

in the United States. Further, while the maximum validity for NAFTA visas is one

year, there is no limit on the number of renewals. Hence, under NAFTA there may

be more people remaining in the United States for an extended period of time

without converting to permanent resident status. One might expect that a large

increase in temporary migration, if it were a precursor to staying on in the United

States, would eventually lead to a noticeable increase in permanent migration to

the United States. The stability of the data on permanent emigration, 1997 being

the most recent year for which data are available, suggests there have been no

such conversions on a large scale.

For these reasons, it is important to examine both permanent and temporary

migration when estimating the magnitude and characteristics of outflow from

Canada to the United States. The U.S. Immigration and Naturalization Service

(INS) provides reliable information on permanent migration from Canada to the

United States. However, its data on temporary migration, while meeting the

administrative purposes for which they were designed, do not provide a reliable

count of people leaving Canada to live in the United States on a temporary basis.

The literature on this possible "fallout" aspect of the treaty has not been fully

investigated, but there is enough data to indicate that further investigation is

warranted. DeVoretz (1992) also notes that in the 1990s, the United States

instituted two major immigration policy measures which both led to changes in the

skill content and size of Canadian emigration flows to the United States. First, the

1990 United States Immigration Act increased the number of employment-based

slots ("E" and "H" visas), which meant highly skilled Canadians no longer had to

line up in the overcrowded family reunification entry category. Next, the mobility

provisions of, at first, the Canada-US Free Trade Agreement (1989) and then North

American Free Trade Agreement (1993), which inaugurated the "TN" visas for

Canadians with a Bachelor's degree or higher, altered the filter that Canadians

faced when contemplating temporary emigration to the US. In addition to these two

immigration policy measures, the "L" visa, which allowed intracompany transfers

to the United States by Canadian-based companies, kicked into effect with a

vengeance in the post-NAFTA era. This dramatic transformation of the way the

U.S. immigration policy regime affected Canada could mean that reference to the

pre- 1989 era for evidence of a Canadian "brain exchange or drain" is largely

irrelevant.

In any case, given the substantial taxpayer subsidy inherent in the Canadian

educational system, and the long-term economic growth and productivity

consequences of this one-way movement to the United States, important policy

issues arise. These include the tradeoff of an accessible, subsidized post-

secondary Canadian educational system against the loss of productive, highly

subsidized immigrants to the United States. There is also the question of how best

to address the short-run or public finance issues: by reducing selected educational

subsidies for potential émigrés or by imposing an exit tax on emigrants, or perhaps

both? In addition, should Canada try to replace skilled workers with immigrants,

with their attendant productivity and administrative costs, or should it instead bribe

highly skilled workers to stay or to return home, as was done in the 1970s? Finally,

how does the short-run loss in reduced tax revenues compare to the resulting long-

run economic growth gained by using tax rates to persuade the "best and the

brightest" to return?

Rationale

There is an obvious "push" of emigrants out of Canada as the numbers

show that workers moving to the U.S. has increased steadily, especially since

1994. This push has been attributed to both political and economic factors with

the economic factors usually stated as the major reasons. In various studies

conducted during the period prior to and since 1994, for example, respondents

voiced four major reasons for moving: 1) No suitable work for their specialty areas;

2) a desire for a more prosperous life in another country; and 3) high rates of local

taxation. The "pull" to the U.S. was attributed to: 1) expectations of a better life; 2)

proximity of the U.S. to Canada; 3) a perception of greater economic opportunity;

and 4) higher income potentials. Such reasons might be expected to be cited, as

they are fairly obvious. However, the full ramifications of a person's opting to

emigrate or immigrate may not be as transparent as one might expect.

Accordingly, it is important for government to understand the dynamics of

migration in order to design and implement effective long-term development goals.

Migration to other places to secure better economic status has always been viewed

as a natural activity for rational individuals. There are key determinants, however,

which can account for greater mobility of certain groups of individuals. Better

educated segments of a population can be expected to exhibit a greater mobility,

because of a broader range of employment alternatives. On the other hand, a

higher propensity to move may also be explained by greater differentials of quality

between one's current employment and that expected in the destination locus.

Therefore, all other things being equal, a less educated labor segment in a given

population will often exhibit a greater incentive to move, but that is not the same

as having the actual ability to relocate. Accordingly, if mobility is associated with

the cost of information and a capability of coping with constraints, then it is the

representatives of the better educated segment of the workforce for whom

relocation will be most feasible.

Worker mobility has long been observed to play a critical role in

implementing the goals pursued by economic systems. In this regard, the ultimate

objective is the efficient allocation of scarce resources and the maximization of

each person's utility. Therefore, if individuals are perceived as human resources,

the labor market would then be expected to function so as to secure free movement

and exchange of the labor force across entire regions, thereby matching the

resources to their best employment opportunities, for the benefit of both the

individuals and their employers.

Mobility often comes at cost, however. On the one hand, labor market might

be far from homogeneous. Different varieties of human capital, depending on such

things as education, experience, and other parameters, might enjoy potential

access to some niches, while being effectively sealed off from the others. In that

case, migration across the segments is largely determined by the cost of

transforming these parameters, which may involve reeducation and other

qualitative augmenting. On the other hand, information regarding employment

opportunities can be imperfect and/or asymmetric, in which case search is costly

and employment optimization cannot be conducted indefinitely. Insider knowledge

or networking possibilities may facilitate job search for some and slow it down for

others. These circumstances effectively impose a gap on the employment

opportunities for high-income/high-wealth categories as opposed to those

belonging to the lower and mid class.

Furthermore, depending on ties with a former employer and familiar

surroundings, such as friends, family, infrastructure and culture, relocation may be

more or less difficult to implement. A highly-experienced employee who has

dedicated a long time to a single job, may well have developed assets, such as

personal reputation and retirement benefits, that are only of high value in a

particular location. Upon transferring to another area then, their value may

deteriorate, which is one common feature of "specific" assets, whose value is

contingent upon geography, position, project, or timing.

Scope

In order to get at the heart of the question, this study examines literature on

the general question of Canada's "brain drain," and delves into extant longitudinal

studies which appear to provide meaningful insight into the nature and causation

of the phenomenon. Both sides of the issue, whether there is such a brain drain or

not, are investigated. First, we present the broad outlines of the controversy,

drawing from current literature and media reports. Second, we explore historic and

current literature that appears to provide some insight into how predictions about

the impact of worker mobility on economic systems are derived. The objective

here is to isolate and identify "push-pull" factors which prompt and sustain worker

mobility. Third, we take a look at demographic data relating to both immigration

and emigration in Canada, focusing primarily on statistical data provided by a

number of governmental and independent studies on the subject. The objective

here is to establish some type of historical baseline to see whether or not there

have been any significant demographic shifts since 1994, the year of the

introduction of the NAFTA treaty. Fourth, we explore and discuss newly emergent

factors, such as the advent of information technology and globalization in an effort

to better identify market dynamics which have heretofore been largely ignored in

statistical studies. Fifth, we formulate a measurement methodology, based on the

statistical data examined, which will delineate and define both the depth and nature

of the perceived problems associated with Canada's "brain drain." The objective

here is to provide an instrument which will clarify the broad ramifications of the

data, and furnish greater insight into the real and imagined parameters of the

problem. Sixth, we undertake an analysis and evaluation of the findings derived

from the data and draw some conclusions about how well or how poorly extant

demographic data supports the hypothesis. Finally, we comment on the evaluative

process, and offer some suggestions for the direction of future studies of this type.

Definition of Frequently Used Terms

1. Brain Drain - A term referring to the emigration of skilled and highly

educated workers from their home country to another country; the term also

connotes the commensurate loss of a country's most valuable segment of human

capital.

2. Immigration - A term referring to an inflow of foreigners into a country for

the purpose of securing permanent residence (Black 750).

3. Knowledge Workers. For the purposes of this study, this term shall refer

to those engaged in one of the learned professions, the information technology

industry, or other occupations requiring a high level of training

and proficiency.

4. Emigration - According to Black's Law Dictionary, emigration means

"The act of removing from one country to another, with intention to not

return. It is to be distinguished from `expatriation,' which means the

abandonment of one's country and renunciation of one's citizenship in it,

while emigration denotes merely the removal of person and property to

another country" (522-523).

5. NAFTA - The North American Free Trade Agreement

6. FTA - The Canada-U.S. Free Trade Agreement

7. Push-Pull Factors - A migration theory that suggests that circumstances

at the place of origin, such as poverty and unemployment, repel or push people

out of that place to other places that exert a positive attraction or pull , such as a

high standard of living or job opportunities.

8. Migration - A "generic" term which is used here to indicate the mass

movement of populations within geographic locales.

9. Net Migration - The net effect of immigration and emigration on an area's

population in a given time period, expressed as an increase or decrease.

10. Permanent Emigrants - people who have left Canada with no intention

of returning, and those who had resided outside Canada for at least two years but

whose intentions about returning are unknown.

11. Rate of Natural Increase - The rate at which a population is increasing

or decreasing in a given year due to a surplus or deficit of births over deaths,

expressed as a percentage of the base population.

12. Temporary Emigrants - persons who have resided outside Canada for

at least six months with the intention of returning, or have resided outside Canada

for no more than two years if their intentions are unknown.

Chapter 2: REVIEW OF THE LITERATURE

Mobility and Human Migration

World population grows as a result of net migration is the difference

between the number of people entering a geographic area (immigrants) and those

leaving (emigrants). Over time, migration contributes more than just the initial

number of people moving into an area, because the children and grandchildren

born to the immigrant population add several times the original number to the

population base. There is also an increase in the number of deaths as a result of

in-migration. Most Americans are immigrants or descendants of immigrants who

arrived here over the past 200 years. Only a small fraction of the population is

related to the American Indians who were here when the first European settlers

arrived in the 1600s. Australia and Brazil are other countries whose current

populations consist primarily of descendants of persons who immigrated there

during the past two centuries.

International migration is at an all-time high in terms of absolute numbers.

About 145 million people lived outside their native countries in the mid-1990s, and

the number is increasing by anywhere from 2 million to 4 million each year. In the

mid-1990s, the largest immigration flows were from Latin America and Asia into

North America, and from Eastern Europe, the countries of the former Soviet Union,

and North Africa into Northern and Western Europe. The Middle East draws

migrants from Africa and Asia and hosts millions of refugees from within

the region. There is considerable migration within Asia, Africa, and Latin America.

Most people move for economic reasons, but some migrate to escape

political or religious persecution or simply to fulfill a personal dream. Some experts

divide the many reasons people leave their homes for a new one into push and

pull factors. Push factors might be widespread unemployment, lack of farmland,

famine, or war at home. The Great Depression (19291939) is a good example of

a push factor, as hard times encouraged more residents to leave the United States

than move in. In the 1980s and 1990s, hundreds of thousands of Africans were

pushed out of their homelands to neighboring countries because of famine and

civil war.

Factors that attract migrants include a booming economy, favorable

immigration laws, or free agricultural land in the area to which the migrant is

moving. The labor shortage in Japan is pulling record numbers of legal and illegal

immigrants to fill the low-status, low- paying, or dangerous jobs that Japanese

natives reject. The United Nations estimates that to keep a working population of

87 million through 2050, Japan would have to accept 609,000 immigrants a year.

Between 1990 and 1999, the number of legal foreigners increased from 1.1 million

to 1.6 million. Estimates of illegal migrants in Japan range from 150,000 to

300,000.

The majority of migrants to the United States in the past 200 years were

European. During the first decade of this century nearly 9 million immigrants

entered this country, and more than 90 percent were from Europe (see chart,

"Regional origins of immigrants to the United States, selected years,"). By mid-

century, just half of the migrants were from Europe. The total number of immigrants

fell to around 1 million in the 1940s. In the 1980s the number of migrants increased

to levels similar to those at the turn of the century. But 84 percent of these migrants

were from Latin America and Asia, and just 10 percent were from Europe. The

volume of legal immigration and the prevalence of migrants from Asia and Latin

America will continue in the new century.

The origins of immigrants change over time, as do their numbers and the

effect that they have on U.S. population growth. According to one estimate, about

42 percent of the U.S. population in 1900 resulted from immigration during the

preceding century. Immigration was an even greater factor in growth between 1900

and 1950, when 20 million people entered the country. Natural increase added an

average of 1 percent of the population increase per year during that period. At that

rate the population would have doubled in about 70 years. But it took only 50 years

to double. Migration stepped up the doubling by 20 years. The volume of legal

migration has fluctuated since the 1930s. Immigration has accounted for an

increasing portion of population growth as American women began having fewer

children. Today one-third of the U.S. population growth is from net migration. The

U.S. Census Bureau projects that the U.S. population will reach 403,687,000 by

2050. Of this projected growth, 36 percent may result from immigration, with

46,691,756 new immigrants being added in the next 50 years.

Of the three

components of population change, migration is the most difficult component to

predict and is most affected by government policies and government policies.

Because nations can control their borders, they may regulate the flow of legal

immigrants. The oil-producing countries in the Middle East offered financial

incentives to attract immigrants, just as the United States and Australia once

offered free land. In 1990, Japan permitted employment rights and residence for

ethnic Japanese from Latin America. In 1998, 660,477 immigrants were admitted

legally to the United States. Many foreigners also enter the country illegally each

year. The exact number of persons migrating illegally to the United States is

unknown, but estimates range from 100,000 to 500,000 per year.

In today's rapidly expanding world economy, the rule appears to be that

geographic mobility of the global workforce has become an essential ingredient for

economic success. Nowhere is this more obvious than in the flow of knowledge

workers from third world countries to the major industrial nations of the West. For

example, according to one study, of the 5 million people who migrated to another

country from 1975 to 1980, two thirds went to the US, Canada, or Australia

(Ehrenberg and Smith, 1999). This tendency for skilled workers to travel abroad

in increasing numbers could reveal the relative importance of current economic

factors among the forces underlying international migration.

According to U.S. census data, immigrants constituted 7.9 percent of the

population and 9.3 percent of the labor force over the period of 1991-1993 (Byerly

& Deardorff, 1995). Within the United States, just over 2.5 percent of all those

employed in 1996-1997, moved between states, and nearly half of them to a

different (nonadjacent) region. About 70 to 85 percent of movers cite economic

over any other reasons for their relocation.

In seeking to determine the direction of such migratory flows, human capital

theory predicts that migration will direct resources away from areas with relatively

poorer earning possibilities and into regions affording superior employment

opportunities (Massey, 1993). When it comes to South-North type migration

(between regions with highly asymmetric developmental statuses), this prediction

clearly finds support. However, North-North (among regions of comparable and

superior opportunities) or South-South type mobility (between the poorer regions)

should exhibit some peculiar patterns not readily accounted for by the simple

reasons surmised previously (Bellante, 1979).

Empirical literature observes that the "push" factors turn out to be stronger

determinants as compared to the "pull" causes. In other words, while the labor

force is definitely strongly attracted in directions of superior employment and

earning opportunities, immigrants do not necessarily come from the poorer

regions. One might expect that it is not only the absolute superiority of earning

opportunities, but also their relative probabilistic qualities (the likelihood of actually

landing better employment) that affects relocation choice on the margin. One

way of assessing such likelihoods would be to look at the unemployment rates in

the specific locations. However, along the lines of the aforementioned

segmentation principle, specific professions should target specific niches. Due to

this fact, as well as because the number of people moving with job offer at hand

far exceeding that of people moving to look for a job, no significant relationship has

been found between unemployment and in-migration. Furthermore, even though

the poorest regions would impose the highest propensity to move on their

populace, they also feature a labor force of the lowest class, with the lowest income

and inferior education and skills, which provides for the lowest mobility. To draw a

tentative bottom line, above and beyond the conventional question of where people

move, the other issue of complementary importance is who tends to move,

accounting for the ever-greater role of demography or personal characteristics of

migrants.

Age appears to be the single most important factor in driving the migratory

pattern in Canada, and indeed, in most countries around the world. Young adults

in their 20s have shown a 12 percent regular migration rate within the country

(Statistics Canada, 1995). By age 32, the rate of migration declines to about 8

percent, and sags to about 4 percent by age 47. Among the explanations for this

is the fact that age is a major factor of human capital deterioration. Moreover, the

second most important constraint on migration is the psychic costs that are also a

direct function of age. The latter has to do not only with the alleged sentimentality

of the elderly, but also with the aspect of specificity of assets, such as community

and interpersonal ties as a function of time period in residence. Of course, the age

dimension is intimately intertwined with, and should properly be studied in isolation

from, the marital and children statuses which both impose additional constraints

on migratory propensity and ability.

Education could be regarded as by far the better predictor of who will likely

move within a certain age group, other things being equal. According to the US

Bureau of Census, more and better education does indeed render individuals more

likely to move into superior employment environments (Byerly & Deardorff, 1995).

Such education might reveal or signal lower specificity of the individual's human

capital, which opens up wider and better opportunities for employment across

segments as well as geographically.

Distance also contributes to the cost of migration in two major ways. For

one thing, it is easier and less costly to acquire information on employment

opportunities closer to home or in adjacent regions. Networking ties also tend to

deteriorate with geographic distance. For another, the transportation cost is also a

function of distance, which thus affects the psychic costs of not meeting with family

and friends for a long period of time. However, several important caveats are due

here to highlight the important dimensions of migration oftentimes overlooked by

literature and more importantly by the conventional census/survey practices.

Migration from rural areas to urban locations and back, or the so-called

circular migration, is one important, and often underestimated, source of

demographic information. Whereas the common approach has been to study

permanent switch of residence from rural areas to urban centers, especially

exhibited by the migratory flows originating from low-income locations, for a whole

family, one profitable way of looking at the actual relocation patterns would be to

study "mixed strategies," whereby part of the family shifts permanently to the city,

with the remaining part residing in the rural locus of origin. While the migrant will

tend to support the rural half upon finding a job, the rural dwellers would tend to

help him in transition period while unemployed. On the other hand, higher quality

of transportation could be studied, at least formally, as a proxy for lower distance.

Better commuting possibilities are one realization of such a solution to the distance

problem, whereby the circular migration could be analyzed as a regularly

occurring, oscillatory pattern, on a lowest (marginal) level, qualifying it as

migration.

More importantly, this dimension of transportation quality and/or distance

now permits a splitting of the two dimensions of migration, whereby the

employment or occupational mobility need no longer be viewed as complimentary

to residential decision, and these two aspects of choice are thus not synchronous

as they used to be. Therefore, one tentative prediction that could be inferred based

on the above would be as follows: The higher the distance and the lower the

quality of transportation, the more likely migration would be permanent if at all.

Otherwise, it might well be oscillatory or circular, thus affording better opportunities

for both the factors and the recipient regions without actually affecting the latter's

demographic structures.

One final dimension of the distance factor amounts to measuring distance

other than geographic. Indeed, people have exhibited a tendency to migrate in

directions where their friends or relatives have previously moved. That could be

viewed as pertinent to psychic costs, largely derivative of personal or cultural

complementarities. Such complementarities do impose constraints on the

maximum allowed distance in the broader, non-geographic sense, and may well

account for the role of interpersonal and cultural causes possibly affecting spatial

mobility. On the other hand, it might also suggest some interesting implications

concerning the clustering and concentration of human resources and factors of

production at large, while at the same time rendering the purely geographic

distance per se of secondary importance.

All of the determinants mentioned thus far are primarily related to domestic

migration. Although do they carry over on an international level, global mobility has

been subject to many additional and heterogeneous constraints, and moreover

has exhibited highly specific dimensions of its own. Thus, the relative distribution

of earnings between the sending and the recipient regions allow us to predict what

skills will be most rewarded, likely employed, and thus reveal the most mobility

expected. For instance, some countries with more sophisticated social safety nets

will tend to exhibit more compressed earnings gap between the skilled and

unskilled labor, unlike in the US where the educational differentials are more

pronounced. The skilled and highly educated labor in these countries will therefore

face higher incentives to migrate to the US where their differentiation actually

provides them with a competitive edge. Moreover, since the US economy

represents a full-blown scope of sectors, it also suggests better, in average or

expected terms, employment to all parameters of human capital. However, while

migrants from the economically advanced regions with more compressed social

security will tend to be positively selected with respect to skill, the less-developed

regions will provide all of its labor stock with significant incentive to seek better

employment. Therefore, as a model example, the US economy will receive

disproportionately unskilled labor from countries with less equal earnings

distributions.

Although most individuals who migrate to a country like the US primarily do

so in the search to improve their well-being, the latter may not confine to better

employment opportunities only. What sets the overall quality of life captures other

options, such as the cultural and societal institutional framework, public goods,

overall social security, and ethnic comfort to name but a few. When societal

institution start playing a major role in the individual's choice, which might as well

be function of one's age or status, religious or political association, and so forth,

migration might shift away from its economic constituent and closer to the political

component. Again, along the lines suggested before, the distance factor, in the

broader sense, is in play, with the choice aimed at reducing this distance at the

lowest cost. Political background in status terms alone might not be sufficient to

force into switch of environments, however. What might likely drive such a choice

is the political uncertainty or volatility in the country of origin. Because return

migration is not an option for political migrants, they will more likely invest in human

capital whose parameters are specific to the host country, while the economic

migrants will tend to have an incentive to preserve the parameters valued in their

home region. Since their investment will primarily be focused and more

concentrated in time) on their human capital, political migrants might and do show

to outperform the natives in job search and earnings growth rate, as well as longer-

term social status.

Studies in migration can be viewed as an important part of what is called

the "modern economic geography" looking into the underlying principles of the

allocation of productive resources, including the historical emergence of urban and

rural centers. One critical area in which our findings on migration of human capital

could come in handy is the so-called economies of agglomeration. It has long been

maintained, in particular, that the genesis of large metropolitan areas can be

explained by the scale economies accruing to concentrated capital. If certain

production or operation processes display increasing returns to scale, then the

maximum output and efficiency could materialize via geographic or temporal

concentration. However, since human capital could engage in complimentary

relationships with other factors, spatial concentration of capital will also trigger that

of labor. Of course, such benefits could only be realized if the human capital is (a)

mobile enough over a short run, (b) largely nonspecific. (Note that specificity could

stem from complementarities with factors or institutions in the present, or status

quo, locations). Over and above the concentration of intra-firm activities, positive

externalities frequently occur across firms as well, whether it be in terms of

common transportation facilities, marketing channels, or institutional infrastructure.

Lucas (1998) suggests some findings on patterns and consequences of

internal migration. Although these observations were originally proposed for the

lower-income or less developed economies, they could, all else equal, apply as

well to the less developed regions in the otherwise advanced countries and could

be used in projecting the effect of social stratification on the patterns of mobility.

Evidently, basic trends tend to second those in the advanced societies, in that the

majority of migrants are young adults in their 20s to 30s, and educated rural

inhabitants have a higher probability of migrating even though, the proportion of

rural dwellers with education is rather low. Although the wage differentials do

matter the most when it comes to migrating decisions, there is insufficient evidence

for the underdeveloped economies and their labor markets of actually offering high

probabilities of employment in the first place.

One alternate explanation, according to the Harris-Todaro model, would be to

expect people to move from rural areas to urban centers in order to try to find a job

since employment information could be qualitatively superior in the adjacent

locations (Preston, 2000). In contrast, tax incentives have not been found to

significantly affect the migration decisions, which might imply that individuals are

more sensitive to the employment probabilities than to residual ratios as applied to

their disposable incomes. Sensitivity to infrastructure factors, such as availability

of better schooling, clean water, or health security, has remained largely

unobserved or overlooked for the less developed societies. Property rights issue

has been found to be significant with respect to the basic rights affecting political

freedoms and criminal situation. Given such agglomeration externalities,

spillovers, and scale economies in infrastructure provisions, the general

presumption is that human capital exhibits a higher mobility than do other factors.

One important consequence of migration is the predicted convergence of

wages across regions and countries. For instance, the famous Heckscher-Ohlin-

Samuelson theorem argues that, as a long-run result of free trade in commodities

based on comparative advantage, the scarcities of, and prices for, underlying

factors will converge across the trading regions, without actual exchange of these

factors (Preston, 2000). However, such indirect convergence would only be

possible for the so-called tradable commodities and services whose production is

underlain by general factors, while non- tradables will require explicit exchange

(migration) of their underlying specific factors, for even partial convergence to

occur. Moreover, wage convergence would depend on the actual skill mix, long-

term shifts in productivity, and the actual wage-setting process. Finally, while

respective convergence could be expected across regions, there's no prior reason

to claim a similar convergence of income across social strata.

Permanent emigration of high-quality human capital is of special

importance for any economy, as it exercise a long-run impact on its productivity

and standard of living. This phenomenon has been studied in the literature as the

"brain drain" issue. One should note, however, that brain drain does not capture

the migratory flows of the relatively unskilled labor, or temporary migration of highly

educated persons who seek better education opportunities abroad or somehow

have no firm plans to enter the domestic active labor force anyway .

Statistics Canada (1999) reports that about 1.5 percent of young persons

who graduated from the higher education institutions in Canada in 1995 moved to

the U.S. Although this proportion might not appear very high in absolute terms,

the reference base constitutes the human resources of the highest quality. In fact,

the percentage of Ph.D. migrants is higher than that of master's graduates (12

percent as compared to 3 percent respectively). In a sense, that could second the

maintained tendency for the upper-class (higher-income or professional)

representatives to be more mobile, as shown by the previously analyzed studies.

The statistics show a distribution of the migration pattern, whereby the weak stay

ratio ex post (over a five-year stay period) constituted about 7 out of 10, with only

3 of 10 intending to return to Canada at some point in the future. It is further

reported that economic (work-related) reasons account for about 57 percent of the

incentive, with 23 and 17 percent relocating for educational and marriage purposes

respectively. Better opportunities, in absolute and probabilistic terms, and higher

expected wages prevailed over the tax incentives. One caveat that might

undermine somewhat the 1995 migratory pattern is the profound changes

occurring in Canada's healthcare system at the time, and obviously affecting its

labor market.

The pattern of the Canadian out-migration to the US labor market exhibits

a particular geographic concentration, with Texas, California, New York, and

Florida accounting for some 45 percent of the destination, particularly for Ph.D.

graduates. Ontario (57 percent) and Quebec (11 percent) were the primary origins

accounting for the most out-migration. In light of these figures, and as a promising

direction for further research, it could be profitable to construct and solve a

transition (Markov) matrix with initial and directional probabilistic states. Identifying

the high-probability directions (sticky states) with highest propensities to stay (once

entered) could provide some useful insights into the geography and demography

of concentration and its stability; for example, where and why migration and

mobility is most and least pronounced.

On the whole, the structure of the US labor force with Ph.D. degrees,

immigrants constitute some 29 percent of those conducting R and D in the industry,

business, and academia. About 22 percent of foreign S and E doctoral recipients

remain in the US for postdoctoral study, and 17 percent accept employment. The

weak stay ratio was on the order of 63 percent, with the confirmed ex post plans

claiming about 40 percent. This again could be explained along the lines of a full-

scope economy approach, whereby human capital moves to whatever locations

promise the best and fullest possible utilization for its parameters.

However, to see whether those who originally planned on staying eventually

did remain in US residence over a prolonged period of time, one would need to

take a look at the ex ante-ex post stay propensity gap, and its distribution over

time. One can see, in particular, no significant evidence for high net return rates

for scientists and engineers over a 10 to 20 years' time span. However, for this

particular group of specialists, possibilities for networking with colleagues in their

home environments. have shown to be particularly high. Another prospective

dimension of research would be to arrive at duration of stay that is optimal to the

host economy's long-run productivity.

There is an extensive empirical literature researching into the factors and

demography of internal migration. Treyz et al. (1993) derives a net migration

equation and estimates it using time-series data for 51 regions over the period

1971-1988. This study finds that the dynamic response of net migration is

significantly sensitive to amenity differentials, relative employment opportunities,

and industry compositions. This attests to the probability that interregional

migration cannot be restrained over a prolonged time span: Even if it is socially

costly, the private benefits may accrue to the migrants and reflect the fact that

migration is a `natural' and historically observed propensity. Frey (1996) suggests

that, over and above the factors contributing to the gap if any between the

migration patterns of professionals versus lower-class workforce, an important

distinction need be spotted to ethnic origin, with domestic migrants tending to favor

areas not attracting immigrants. Massey (1994) obtains that the geographic

concentration of poor blacks should properly be attributed to the residential

segregation of African Americans in urban housing markets, rather than caused by

the outmovement of non- poor blacks or net movement of blacks into poverty.

Boehm (1991) argued that the driving forces behind migration do differ from those

underlying intra-urban mobility, which is routinely affected by the tenure

(housing/renting) availability. Although this study does not specifically address

human smuggling and related issues of mobility, Nicholson (1990) suggests an

important qualification to the conventional research practices drawing on census

data. The latter tend to omit a considerable amount of movement due to

aggregation, and might thus prove little more than mere artifacts of the actual data.

Wilson (1988) studies migration patterns both within and between

metropolitan and non- metropolitan areas, and finds that socioeconomic

transformations of the periphery since the Great Depression have reduced

differences in migration patterns between the periphery and core regions. This

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Type of Edition: Erstausgabe
Year: 2017
ISBN (PDF): 9783960676454
ISBN (Softcover): 9783960671459
File size: 997 KB
Language: English
Institution / College: University of South Africa – Sociology
Publication date: 2017 (April)
Grade: 4.0
Keywords: Human Capital Brain Drain Knowledge worker Canadian USA Immigration to the USA Immigration to the United States Skilled professional worker Managerial worker Free Trade Agreement North American Free Trade Agreement NAFTA FTA Bilateral migration

Author

Roy Della Savia (Author)

Migration and Emigration in Canada until 2003

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Author

Roy Della Savia (Author)