International labour migration and its contribution to economic growth - A case study of labour immigration to Canada

Abstract: The aim of the thesis is to highlight the contribution to economic growth that is attributable to labour migration. Inflow of human capital in the form of international migration is a part of many contemporary economies. Yet, very few models of economic growth recognize migration, and especially labour migration, as a factor influencing economic growth. This thesis constructs a model of economic growth that includes the aspect of labour migration, which is referred to as the “labour immigration-augmented model of technological transfer”. The findings of the model are analysed in a case study of Canada, a country with a very active immigration policy that is specifically aimed at attracting skilled labour. The model and the case study find that the human capital in terms of formal education of labour immigrants to Canada is higher than the human capital of the Canadian-born population. Thus, the potential contribution to economic growth by labour immigrants to Canada is higher than the domestic equivalent. This thesis concludes that barriers to integration and the transferability of skills create a divergence between the potential and the actual contribution to economic growth by labour immigrants to Canada.