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L. HOTEL. CITIZENSHIP ASCENSION AND EXODUS. Don DeVoretz Simon Fraser University. Immigration Triangle. Neo-classical model of movement no longer valid Immigration policy and globalization have added choice of movement at each stage

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  1. L HOTEL CITIZENSHIP ASCENSION AND EXODUS Don DeVoretz Simon Fraser University

  2. Immigration Triangle • Neo-classical model of movement no longer valid • Immigration policy and globalization have added choice of movement at each stage • Economic incentives for decision to move or to stay altered by • a. human capital investment • b. state subsidies • c. public good entitlements with citizenship

  3. Figure 1. Immigration Triangle

  4. Triangular Movement • A-B: Sender to entrepot country (Canada) • Entrepot supplies subsidized • general human capital (language, job market) • specific human capital (certification, credential recognition) • public goods (citizenship, public health, education) • Entrepot attracts risk-adverse immigrant from country A • A-C: Sender to no-welfare host • Host country • supplies: - little or no subsided human capital - public goods: citizenship • attractsrisk takers: Borjas country

  5. Mobility choices • Immigrant as myopic maximizer • who at each point must make a decision to stay or to move: if the discounted income and amenities at present location > alternatives, stay; otherwise, move • Possibilities • A-B stay; majority are risk-adverse • A-C stay; majority are risk takers • A-A; return migrant who failed or succeeded • A-B-C; risk-adverse onward movement 5

  6. Figure 2. Four-stage Decision Tree HOTEL

  7. Four Stages • Stage I: Move or stay in sending country • Stage II: Stay in B or move on to A or C • Period 1: entrepot country offers advanced forms of general human capital ( enhanced language training, certification, credential recognition, bridge training, etc.) more or less portable across economies • Period 2: Period of integration (2-15 years or never for citizenship) • Agent 2 offers citizenship • Stage III: Post-citizenship • Accept and stay or move on • Reject and stay or return home • Stage IV: Choice of final destination

  8. Reason for Gap in Citizenship Ascension

  9. Economic Impact of Citizenship Case I: Overachievers

  10. Economic Impact of Citizenship • Large for all four cases? • Why? • Third stage of self-selection • accumulates human capital prior to ascension • labour market barriers removed • end of discrimination? • rate of return on human capital rises • To stay or move? • Compare post-citizenship earnings to ROW

  11. Economic Impact of Citizenship Case II: Cross-over

  12. Table 1. Outmigration of Old Vintage Naturalized Immigrants

  13. Table 2. Outmigration of Old Vintage Naturalized Immigrants

  14. Some Trends Few countries show outmigration, and those that do have rates in the double digits: Old Vintage: (Table 1) Post-1960-1996 arrivals New Vintage: (Table 2) Post-1996-2000 arrivals

  15. Positive or Adverse Selection of Canadian Citizens Abroad? • Canadians in the United States: • Strong positive selection for naturalized Canadians: • U.S. resident Chinese-Canadians: + US$56,695 • “ “ Indo-Canadians: US$58,050 • sub-samples respectively exceed income of all Americans and Canadian-born Canadians • No positive selection for Canadian-born Canadians • Canadians in Hong-Kong: • Strong positive selection for naturalized Canadians • 50% naturalized Canadians with post-secondary education vs. 25% of Hong Kong stayers in Canada • although they earn less than other returnees, they earn much more than Hong Kong-born stayers in Canada

  16. HOTEL Conclusions • Strong evidence of positive sorting for at least two groups and the triangular model of immigration and citizenship ascension • Intervention? • majority of immigrants have not left • both Canadian-born and naturalized Canadians form the majority of exodus; to date, limited policy response to traditional ‘brain drain’ issue • cause for concern: “checking out anytime you like, but never leaving” = retirement with large social benefits • Some possible policy responses: • tax worldwide income − restrict citizenship inheritance − differential passport fees − provident funds

  17. The END Welcome to Canada!

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