THE LINK BETWEEN IMMIGRATION AND UNEMPLOYMENT IN CANADA

In this paper we consider the joint relationship between immigration a nd unemployment rates in Canada, conditional on aggregate demand and s upply factors, using quarterly data for the period 1962-1990. The nove lty of the study, apart from adding to the few attempts at assessing t he empirical link between immigration and unemployment for Canada, con sists first in applying time series methods that permit current immigr ation to be jointly determined by past, as well as current and future unemployment rates. Second, we present evidence about transitory versu s permanent effects of unemployment on immigration in addition to perf orming tests based on relationships estimated for every possible subsa mple as opposed to some ad hoc subsample selection. Among the salient results of this study is that current increases in the unemployment ra te reduced future immigration rates before 1978. After 1978, however, there is a positive association between past immigration and current u nemployment.