The Important Role of Migration for an Ageing Nation - Assignment Example

Effects of Immigration and Aging Workforce The potential effect of an gradually aging citizens in Canada is likely to impact heavily on the economy. There is less likeliness of the aging population to the economy since the expenditures on their healthcare would increase immensely. With increased expenditures on the aging, the administration would need to cut expenditures and revert to catering for the aged or increase taxes. Fiscal policies such as increase in taxation would strain the quality of living of Canadians since they would be compelled to pay more in taxes.

Alternatively, when the government applies cuts in expenditures in the economy, some service provisions would become opportunity costs. This would affect the economical development with the abandonment of some services.Austerity measures applied by the administration because of the increasing aging population would cause diminution in the living standards. Labor supply would get affected negatively by causing skilled employees numbers to drop causing exceptional hike in the cost of labor. Lower savings would negatively affect the actual Gross Domestic Product.

The lower saving would be because of reduced savings attributable to the high numbers of retirees, who would not be saving anymore. The Canadian physical capital stock would also extensively reduce because of the reduced savings that would create a diminishing impact on real capital per head. Increased immigration in Canada helps in balancing the effects of the increasing dependency ratio by supplying skilled economic skills to the Canadian economy. However, it is worth to note that increased immigration of skilled workers does not necessarily imply economic growth and development.

The effects of immigrant workers are largely neutral on the economic performance. On the flipside, increasing numbers of immigrants cause pressure on the government for provision of basic services such as housing and other administrative services. These pressures may negatively affect the government and spills to the economic performance.Increased immigration has immense benefits as an alternative for cushioning the economy from effects of increased aging, and if spread throughout the country would benefit the economy.

ReferencesCanadas Aging Population May Create $67-Billion Annual Budget Hole: Study. (n.d.). Retrieved November 29, 2014, from http://www.huffingtonpost.ca/2011/11/03/grey-tsunami-canada-aging-population_n_1074203.html(n.d.). Retrieved November 29, 2014, from http://www.immigrationwatchcanada.org/wp-content/uploads/2014/03/Cost-Benefit-Cdn-Immigrati.