Canada Case Study Explores the Limits of Immigration to Ease Demographic Decline

2025/03/01 Leave a comment

Good and relevant study by Dan Hiebert on the need for realism and a shift towards population policy framework:

High-income countries globally face a stark demographic transition as their populations age and fertility rates decline, with key implications for productivity and the maintenance of retiree benefits if tax bases decline as workforces shrink. Questions remain about how and to what extent immigration can help slow this transition and soften the impact on labor markets. 

Canada offers a unique vantage point on the role that immigration can play in easing demographic decline—and the potential drawbacks. Over the past decade, rising permanent and temporary migration accounted for the entirety of Canada’s labor force growth. But the rapid pace of change has come with challenges. By 2024, Canada’s historic embrace of immigration had cooled amid public concerns about its impact on housing costs and public services. 

In a new report out today for the Migration Policy Institute’s Transatlantic Council on Migration, respected Canadian researcher Daniel Hiebert investigates the efficacy of immigration in addressing population change and the old-age dependency ratio. The report examines Canada’s demographic challenges (its total fertility rate of 1.26 children per woman is among the lowest rates globally) and recent changes in migration policymaking before exploring the consequences of setting immigration rates at different levels. The report uses six scenarios for admissions and population projections over the next half-century that were commissioned from Statistics Canada. 

The report finds that while the six scenarios, which range from high- to near net-zero immigration, would produce very different overall population sizes by 2046 and 2071, the old-age dependency ratio would rise even under the highest immigration rate. “These scenarios point to an important lesson: Immigration can grow the population and slow the effects of falling fertility, but it is less efficient at changing the age composition of the population,” writes Hiebert, emeritus professor of geography at the University of British Columbia. That is because immigrants themselves age and eventually retire alongside their native-born peers. 

To tackle the rising old-age dependency ratio and the prospect of shrinking workforces, policymakers would need to also consider other interventions, such as raising the retirement age, Hiebert writes. 

The report, Understanding the Impact of Immigration on Demography: A Canadian Case Study, argues that for immigration policy to effectively tackle Canada’s challenges, policymakers will need to frame a long-term strategy that considers a number of intertwining realities, including: 

  • Calibrating immigrant admissions together with decisions about social spending and investment in housing stock and infrastructure. 
  • Taking a longer lens than the standard three-year population plan, given the consequences of changing immigration targets play out over decades. This also means recognizing the need for different policy interventions as “fast” regions such as large cities face pressures on housing and infrastructure from above-average population growth, while “slow” regions such as rural areas will need help navigating depopulation and rising old-age dependency ratios. 
  • Effectively communicating with the public to set appropriate expectations for immigration. 

“Canada is frequently seen as an exceptional case, globally, with a population that has been willing—enthusiastic, even—to accommodate a relatively high rate of immigration. This consensus has become frail and the Canadian government (like others around the world) has changed its tone on immigration, acknowledging that there are costs to immigration-led population growth,” Hiebert writes. “Nevertheless, demographic challenges are resolute and ignoring them will, eventually, also carry economic and political consequences.” 

While few governments globally have clearly and forcefully articulated the unprecedented levels of old-age dependency that are looming, and the resulting painful economic adjustments ahead, embarking on a national conversation around demography, engaging with the tough policy trade-offs involved and building a population strategy could help raise Canadian public awareness, the author concludes.

Read the report here: www.migrationpolicy.org/research/immigration-demography-canada. 

Source: Canada Case Study Explores the Limits of Immigration to Ease Demographic Decline

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Economics, Dominated by White Men, Is Roiled by Black Lives Matter

2020/06/12 Leave a comment

Tone deaf and blindness about socioeconomic realities:

The national protests seeking an end to systemic discrimination against black Americans have given new fuel to a racial reckoning in economics, a discipline dominated by white men despite decades of efforts to open greater opportunity for women and nonwhite men.

A growing chorus of economists is seeking to dislodge the editor of a top academic publication, the University of Chicago economist Harald Uhlig, after he criticized the Black Lives Matter organization on Twitter and equated its members with “flat earthers” over their embrace of calls to defund police departments.

Days earlier, the profession’s de facto governing body, the American Economic Association, sent a letter to its members supporting protesters and saying that “we have only begun to understand racism and its impact on our profession and our discipline.” A group of economists, mostly from outside academia, last week hosted an online fund-raising effort for the Sadie Collective, an organization that aims to bring more black women into the field.

Black economists say the events have brought some progress to a field that has long struggled with discrimination in its ranks — and with a refusal by many of its leaders to acknowledge discrimination in the country at large. But the profession remains nowhere close to a full-scale shift on racial issues: On Wednesday, the director of the White House National Economic Council, Larry Kudlow, told reporters, “I don’t believe there is systemic racism in the U.S.”

Black Americans are vastly underrepresented among economics students and professors, a wide range of data have shown. There are no black editors of the most prestigious economics journals. There are no black professors in the main economics department at Chicago, Mr. Uhlig’s employer, which is one of the most storied departments in the country.

In a survey of economists released by the American Economic Association last year, only 14 percent of black economists agreed with the statement that “people of my race/ethnicity are respected within the field.”

As protests against discrimination have grown in recent days, a conversation has erupted — often led by black economists — over how the lack of diversity has left the profession ill equipped for a moment where policymakers are seeking ideas on how to combat racial inequality in policing, employment and other areas.

“Hopefully, this moment will cause economists to reflect and rethink how we study racial disparities,” the Howard University economist William Spriggs wrote to colleagues in an open letterthat was posted this week on the website of the Federal Reserve Bank of Minneapolis.

“Trapped in the dominant conversation, far too often African American economists find themselves having to prove that African Americans are equal,” he continued. “We find ourselves, as so often happens in these ugly police cases, having to prove that acts of discrimination are exactly that — discrimination.”

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The American Middle Class Is No Longer the World’s Richest

2014/04/24 Leave a comment

Understandably, the Government has claimed credit for Canada now having a higher middle class income than the US (any government would do the same, even though this is a 30-year trend involving many governments).

I recall during the 1990s the then Mulroney government had a “prosperity initiative” that included studies by Michael Porter who was then a major figure on theories and factors involved in growth (and has broadened his focus since then: see We’re Not No. 1! We’re Not No. 1! – Porter’s Social Competitiveness Report). At the time, one of the talking points was that Canada was a Honda Civic nation, the US was a Honda Accord. Times have changed.

And the most interesting part is the explanation, which has public policy implications:

Three broad factors appear to be driving much of the weak income performance in the United States. First, educational attainment in the United States has risen far more slowly than in much of the industrialized world over the last three decades, making it harder for the American economy to maintain its share of highly skilled, well-paying jobs.

Americans between the ages of 55 and 65 have literacy, numeracy and technology skills that are above average relative to 55- to 65-year-olds in rest of the industrialized world, according to a recent study by the Organization for Economic Cooperation and Development, an international group. Younger Americans, though, are not keeping pace: Those between 16 and 24 rank near the bottom among rich countries, well behind their counterparts in Canada, Australia, Japan and Scandinavia and close to those in Italy and Spain.

A second factor is that companies in the United States economy distribute a smaller share of their bounty to the middle class and poor than similar companies elsewhere. Top executives make substantially more money in the United States than in other wealthy countries. The minimum wage is lower. Labor unions are weaker.

And because the total bounty produced by the American economy has not been growing substantially faster here in recent decades than in Canada or Western Europe, most American workers are left receiving meager raises.

American Incomes Are Losing Their Edge, Except at the TopInflation-adjusted, after-tax income over time

Finally, governments in Canada and Western Europe take more aggressive steps to raise the take-home pay of low- and middle-income households by redistributing income.

The American Middle Class Is No Longer the World’s Richest – NYTimes.com.

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