Suppose there is currently naturally positive selection of immigrants to Canada. What would happen to immigration to Canada if the earnings return to skills were to fall in Canada?
Question
Suppose there is currently naturally positive selection of immigrants to Canada. What would happen to immigration to Canada if the earnings return to skills were to fall in Canada?
Solution
If the earnings return to skills were to fall in Canada, it could potentially decrease the rate of immigration to Canada. Here's why:
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Positive Selection of Immigrants: This term refers to the phenomenon where individuals who choose to immigrate are those with higher skills or abilities compared to those who choose not to immigrate. In this case, Canada is attracting immigrants with higher skills.
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Earnings Return to Skills: This refers to the increase in earnings or income that an individual receives as a result of increasing their skills or education. If this were to fall, it means that the financial incentive for increasing skills or education is reduced.
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Impact on Immigration: If the earnings return to skills falls in Canada, it reduces the financial incentive for highly skilled individuals to immigrate to Canada. These individuals may choose to immigrate to other countries where the earnings return to skills is higher, or they may choose not to immigrate at all.
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Overall Effect: Therefore, a fall in the earnings return to skills in Canada could potentially lead to a decrease in the rate of immigration to Canada, particularly among highly skilled individuals. This is because the financial incentive for these individuals to immigrate to Canada has been reduced.
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