OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

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Making the most of immigration in Canada

Canada’s immigration policy aims to promote economic development by selecting immigrants

with high levels of human capital, to reunite families and to respond to foreign crises and offer

protection to endangered people. Economic-class immigrants, who are selected for their skills,

are by far the largest group. The immigration system has been highly successful and is well run.

Outcomes are monitored and policies adjusted to ensure that the system’s objectives are met. A

problematic development, both from the point of view of immigrants’ well-being and increasing

productivity, is that their initial earnings in Canada relative to the native-born fell sharply in

recent decades to levels that are too low to catch up with those of the comparable native-born

within immigrants’ working lives. Important causes of the fall include weaker official language

skills and a decline in returns to pre-immigration labour market experience. Canada has

responded by modifying its immigration policy over the years to select immigrants with better

earnings prospects, most recently with the introduction in 2015 of the Express Entry system. It

has also developed a range of settlement programmes and initiatives to facilitate integration.

This chapter looks at options for further adjusting the system to enhance the benefits it



Keywords: productivity, discrimination, government budgets, skills, refugees, integration, points system, immigration, debt
JEL: J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; J15: Labor and Demographic Economics / Demographic Economics / Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination; F22: International Economics / International Factor Movements and International Business / International Migration; J6: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers; J71: Labor and Demographic Economics / Labor Discrimination / Labor Discrimination
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