Toward 'A Rational Immigration Policy': Comments and a Proposal

Abstract

In a recent article in this journal, Star (I975) attempted to develop 'a rational immigration policy.' He claimed that immigration policy has either economic or humanitarian objectives but, as an economist, he felt he could address himself only to the question of its economic desirability. He mentions various costs imposed by immigrants on Canadians (for example, congestion), but focuses on the displacement of Canadians from potential employment. His proposal was that, for a given immigration to be allowed, it should raise (or presumably at least not reduce) the realper capita income of prior Canadians. In this note we take issue with Star's analysis. First, we claim that the humanitarian/economic dichotomy is not a productive one, and that there is a trade off between humanitarian immigration and its economic effects; moreover, immigration policy should be discussed within the general framework of economic assistance to the rest of the world. Second, the job-displacing nature of immigration is a short run phenomenon only, but more important, it assumes passive fiscal and monetary policies, which need not be the case. Third, Star's economic criterion should be extended to include gains to Canadians in terms of leisure and the benefits derived by, at least, the children born in Canada to immigrants. Fourth, if immigration lowers incomes of prior Canadians, potential migrants should be allowed to compensate for this effect, by paying an 'admission fee' or income tax surcharge. On the whole, we believe that Star's framework underestimates the optimal level of immigration, and that his suggestion that it will be lower than the current one (Star, 1975: 341) is pure speculation.