Correlation between GDP per capita and immigration rates in Canada - Essay Example

College Introduction Immigration has a lot of impact on the host countries economic progress. There is a public and political concern in Canada with regard to the impact of immigration to the country state of economy in light of GDP per capita. Economist has however studied the impact of immigration on host countries and how the economy of a country is influencing the influx of immigrants in to the host country. Immigration often affect the employment of the native residents but mainly being determined by the role the host country’s residents play in the labor market (Nadeau 2011). Immigration is always caused by an individual decision to seek for a job opportunity and that is why the economy of the host country plays key role in instigating the immigration (Nadeau 2011). Especially when immigrants are very skilled labor they will be preferred over the host’s nations residents who might not be having both experience and skilled manpower. High growth in a country’s GDP means that more good things for a country and even though growth may not be the only requirement for better well being it is very essential because income and consumption is very important (Nadeau 2011). The cause for the rise of crisis within the employment sector as a result of immigration is partly due to the fact that immigrants create few employments opportunities as compared to the positions they are filling in. In Canada, immigration rate didn’t affect the country’s economic growth until around 1980s when it then started affecting unemployment rate (Grubel and Grady 2011). In the last 10 years, there had been over 240,000 immigrants into Canada per year who have become permanent residents by virtue of admission. In 2003 there were a total of 221, 300 but later in 2010 the figure rose to 280,600 a big rise indeed (Grubel and Grady 2011). Among this immigrants majority are women who make up over half the total number of those admitted. Immigrants being admitted have women that are more represented in comparison with the other gender. Women also do make big portion of those dependents on the immigrants. In the above mentioned period women have made up to 60.2 % in family category, this range from 58.6 percent to 60.2 percent over the last 10 years (Grubel and Grady 2011). On the side of economic applicants principal men outnumbered women. Despite the fact that women are smaller in number among the economic principal applicants in relation to men their figure have been rising steadily over the past few years starting from 26.1 percent in 2003 and hitting 40.2 later in 2011 (Grubel and Grady 2011). There are a proportion of immigrants whom they are women mainly who came in as live caregivers. Over the last 10 years (2002–2011), 68.5 percent (roughly 1.3 million) of all new immigrants aged between 15 and 64 indicating an intention to work upon arrival (Grubel 2009). This proportion ranged from a low of 66.4 percent in 2006 to a high of 70 percent in 2010. Furthermore, 38.8 percent of spouses and dependants of economic immigrants indicated an intention to work upon arrival, as did 99.8 percent of economic principal applicants. Across all categories, immigrant men (82 percent) are more likely than women (55 percent) to join the labour force upon arrival (Grubel 2009). Gross domestic product (GDP) per capita results from the GDP divided by the country population at the middle of the year. To find the GDP of a country, the cross value of all producers in the economy are added together plus any product taxes and subtract subsidies. The calculations do not consider the depreciation of assets or degradation of natural resources (Grubel 2009). The GDP calculation is normally done by the World Bank and IMF. The wealth of the country is normally determined by the GDP and in many occasions it does not reflect the real cost of living in a country. The GDP per capita for Canada for the last 10 years with percentage change is shown below. 2002 =$23,425=3.47 % 2003 =$27,335=3.06 % 2004 =$31,012=4.92 % 2005 =$35,088=5.21 % 2006 =$39,250=5.07 % 2007 =$43,246=4.05 % 2008 =$45,100=1.75 % 2009 =$39,656=-2.93 % 2010 =$46,212=3.21 % 2011=$47,102=3.31 % 2012=$48,321=3.41% The current GDP per capita for Canada stands at $48,321. In 2002, it was $23,425. Over the last ten years, the value has been fluctuating between $23,425 and $48,321. There was a great improvement in the country growth between 2004 and 2006 because the percentage GDP growth rate moved from 4.9% to 5.07%. In the last 10 years, the Canada economy fell in 2008 following the world financial crisis, this happened for the first time since 1990 and 1991 world recession. The world financial recession is blamed on US mortgage lenders and tax lending forms on European banks. In all the developed countries, Canada banking institution is in the best shape (Nadeau 2011). Canadian banks did not get involved in giving huge mortgage during the begging of 2000 hence no bank collapsed. The decline of United States importing goods from Canada and failure of equity values and prices of goods lead to a 1.75 % shrinking of economy in quarter of 2008. Since the population grows due to the huge number of immigrants getting into the country, the population growth became higher than the GDP growth rate hence income per capita goes down. Due to the low birth rate, expansive land and huge deposits of minerals, Canada has encouraged an influx of immigrants into the country to help in the economic development. Over the last 10 years, the number of immigrants has increased to 280,600 in 2011. At the same time, the income per capita in Canada has risen for the last 10 years to $48,321 (Grubel and Grady 2011). This is attributed to the fact that there is an increase in the educated and skilled level immigrants over the last 10 years; this has improved the productive in the manufacturing industries. Once they are employed, they pay tax to the government hence fuelling the economic growth. The state that has benefited larger from the immigrants is Alberta. The sate has several minerals deposits including oil but it has been having a shortage of laborers for a long time. Following the coming of the immigrants several industries has been opened and the state is one of the richest in Canada today. As a result of more immigrants coming into Canada the higher the GDP and the better the economy. References Herbert, Grubel and Patrick, Grady. Immigration and the Canadian Welfare State 2011. Studies in Immigration and Refugee Policy. Fraser institute, 2011. Serge, Nadeau. The Economic Contribution of Immigration in Canada—Recent Developments What do we know? What does it mean for policy? Research Group on the Economics of Immigration. Ottawa, 2011 Herbert, Grubel. The Effects of Mass Immigration on Canadian Living Standards and Society. The Fraser Institute, 2009 Read More