Title: The Economics of Canadian Citizenship
1The Economics of Canadian Citizenship A Common
Ground for Social Scientists ?
Don J. DeVoretz Senior Research, MBC Professor,
Simon Fraser University Canada don.devoretz_at_sfu.
ca Presentation to Metropolis June 24th ,
2009 Ottawa, Canada
2Overview
- Economists and inter-disciplinary work
- Limited Success
- RIIM example
- Necessary and Sufficient ingredients
- Correct research question(s)
- Lends itself to utility maximazition with
- derivable hypotheses
- Empirical verification
- Translate demographic, political into costs or
benefits - Economics of Citizenship fulfills the above
3Objective of Research on Economics of Citizenship
- To answer
- Why do immigrants ascend to citizenship at
different rates ? - What are the economic consequenses of this
ascension ? - To Model
- The affect of economic (income, occupation),
social (marital status, household size, children,
etc.), political (dual citizenship up or out,)
and demographic (age, years in host country)
variables on the immigrant decision to ascend to
citizenship - The economic impact of citizenship on the
occupational distribution and earnings levels of
immigrants
4Literature Ascension Non-Economists
- Yang (1994)
- Demographic, political and social variables.
- Bloemraad (2002)
- Canadian dual citizenship more likely if
- Youth, education and offical language in Canadian
home - Mata, Fernando. (1999)
- Principal Components 1996 Canadian Census
- No evidence of economic impact of Canadian
citizenship - Yang (1994)
- Conclusion Ad hoc and no role for economic
variables
5Literature Economic Impact
- Pivnenko and DeVoretz (2003)
- evidence of citizenship affect on Ukrainian
earnings in Canada - Earnings of Ukrainain foreign-born citizens
equals Canadian-born Ukrainians - Chiswick (1976)
- Found no evidence for citizenship effect in USA.
- Bratsberg B, et. al(2002)
- Youth panel data in USA
- citizenship alters occupational distribution and
raises earnings - Affect is greater for immigrants from less
developed areas
6Methodological Conclusions
- No comprehensive study of ascension and economic
impact of citizenship to date. - Economic Methodology supports merging of two
questions - Utility maximization at the ascension stage
affects economic impact e.g. human capital
accumulation during ascension stage
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8Why the Ascension Gap?
- Presence of Dual citizenship ?
- Level of development home country ?
- Externalities of Home country passport
- Length of stay in Canada
- Temporary or permanent ?
- Ease of Family Renification ?
- Remittance costs vs parental help with kids
9Why Smaller Age Earnings Gap After Citizenship ?
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12Employment Outcomes
13Costs and Benefits of Ascending to Canadian
Citizenship
- Costs
- no access to the home country labour market
- the possible loss of the right to hold land, or
the requirement to pay higher land taxes - loss of entitlement to home country public
services, such as subsidized education for
children - curtailing of social benefits in home origin
country. - Benefits
- access to the federal government labour market
- potential access to merged labour markets (e.g.
NAFTA or EU) - any wage premium paid by private employers to
citizens - a host country passport with its implied visa
waivers, which lead to greater worldwide
mobility - immunity from a military conscription in home
country - ability to participate in the political process
14Some Empirical Evidence on Immigrant Citizenship
Ascension
- Prediction ALL HOLD
- Rates of ascension to citizenship are a positive
function - of age,years in Canada, gt0
- occupation status, gt0
-
- home countries absence of dual citizenship
policy,lt0 -
- marital status and presence of children gt0
- and ECONOMIC GAINS gt0 and
15Citizenship Impact on Earnings
- Citizenship increased earnings
- More for non-OECD immigrants
- Females 12.6 , males 14.4 Non-OECD
- Females 5.8 , males 4.1 OECD
- All other variables as predicted
16Blinder-Oaxaca Decomposition
- Decompose sources of earnings differences for
citizens and non-citizens - Endowment differences
- Discrimination
- amount that productive characteristics of
Foreign-born are overvalued or undervalued
relative to Canadian-born
17Table 3. Decomposition of wage differentials between naturalized and native-born Canadians1 Table 3. Decomposition of wage differentials between naturalized and native-born Canadians1 Table 3. Decomposition of wage differentials between naturalized and native-born Canadians1 Table 3. Decomposition of wage differentials between naturalized and native-born Canadians1
Human capital endowments effect Discrimination component Wage differential
Females Females Females
OECD 5.91 -5.57 0.34
non-OECD 9.87 10.94 20.81
Males Males Males
OECD -5.81 -7.06 -12.86
non-OECD 5.10 21.45 26.55
Source DeVoretz and Pivnenko (2006) Source DeVoretz and Pivnenko (2006) Source DeVoretz and Pivnenko (2006) Source DeVoretz and Pivnenko (2006)
1 These estimates are based on the log-linear
OLS
18Decomposition Conclusions End of Discrimination ?
- OECD Males earn 12.86 more as citizens because
- Greater human capital than Canadian-born
- Greater return on human capital
- OECD Males earn 26.5 less as citizens because
- 21.45 smaller rewards for human capital and
- 5.1 less human capital than Canadian-bonr
19 Conclusions on the Common Ground
- Citizenship Ascension and Economic Impacts
should be jointly modeled - Economic, Political and Social variables should
be merged - Need Comparative studies across
- Countries Netherlands, Sweden, USA
- Disciplines Political Science