Dutch disease and the mitigation effect of migration: Evidence from Canadian provinces

Arbeitspapier

This paper looks at whether immigration can mitigate the Dutch disease effects associated with booms in natural resource sectors. We first derive predicted changes in the size of the non-tradable sector from a small general-equilibrium model à la Obstfeld-Rogoff, supplemented by a resource income and a varying labour supply. Using data for Canadian provinces, we test for the existence of a mitigating effect of immigration in terms of an increase in the size of the non-tradable sector triggered by the positive resource shock in booming regions. We find evidence of such an effect for the aggregate inflow of migrants. Disentangling those flows by type of migrants, we find that the mitigation effect is due mostly to interprovincial migration and temporary international migration. There is no evidence of such an effect for permanent international immigration. Nevertheless, interprovincial migration also results in a spreading effect of Dutch disease from booming to non-booming provinces.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3813

Classification and Topics

• Classification: Wirtschaft ; International Migration ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; General Regional Economics: Econometric and Input-Output Models; Other Models
• Subject: natural resources ; Dutch disease ; immigration ; mitigation effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Beine, Michel ; Coulombe, Serge ; Vermeulen, Wessel N.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/57969
• Last update: 10.03.2025, 11:45 AM CET