My paper contributes to the overall literature on the fiscal impact of immigration, and particularly to the section of the literature that has focussed on Canada: my findings of small negative fiscal impacts in the absence of discrimination are fairly close to most of the existing estimates, with the exception of the much larger negative findings in Grubel and Grady (2011) and Grady and Grubel (20. [...] Section 2 presents the main model of the paper, while section 3 presents the calibration and the numerical simulations of the effect of discrimination on the estimated fiscal impact of immigration. [...] In the scenario in which immigrant wage gaps are explained by discrimination, panel B presents the results; unsurprisingly, the results with the naive method are roughly identical to those without discrimination: the two versions of the model are calibrated to the same moments, including wages and unemployment rates, and so the calculations of the taxes paid and benefits received by different grou. [...] 17Unlike the other models, it was not possible to perfectly match the moments in these calibrations, due to the discretization of the distribution of A and the greater complexity of the model; but minimizing the sum of squared deviations between moments in the data and the simulation, the fit remained very close, corresponding to an average absolute deviation of 0.0015 or less. [...] I calibrate the model to the same moments from Table 2, using the values from Table 1 for the other parameters, and the results of the calibration can be found in Tables 11 and 12; the parameter values are very similar to those from the baseline model.
- Pages
- 33
- Published in
- Canada
