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The Benefits of Immigrants to Canada: Evidence on Tax and Public Services

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Abstract

The life-cycle theory implication that immigrants, being young at the time of arrival, should benefit the native-born population in a tax-transfer system is analyzed for Canada. Microdata from the 1981 Canadian Census of Population are used. Consumption of major public services and payment of major taxes by the average immigrant and non-immigrant households are considered. It is observed that even after they have stayed for 35 years in Canada, immigrant households are a source of public fund transfers to non-immigrants. This confirms the life-cycle net benefit hypothesis. Implications for public policy with respect to immigration policy are suggested.

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