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Dutch Disease and the Mitigation Effect of Migration: Evidence from Canadian Provinces

Lookup NU author(s): Dr Wessel Vermeulen

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This is the authors' accepted manuscript of an article that has been published in its final definitive form by Wiley-Blackwell, 2015.

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Abstract

This article evaluates whether immigration can mitigate the Dutch disease effects associated with booms in natural resource sectors. We derive predicted changes in the size of the non-tradable sector from a small general-equilibrium model à la Obstfeld–Rogoff. Using data for Canadian provinces, we find evidence that aggregate immigration mitigates the increase in the size of the non-tradable sector in booming regions. The mitigation effect is due mostly to interprovincial migration and temporary foreign workers. There is no evidence of such an effect for permanent international immigration. Interprovincial migration also results in a spreading effect of Dutch disease from booming to non-booming provinces.

Publication metadata

Author(s): Beine M, Coulombe C, Vermeulen WN

Publication type: Article

Publication status: Published

Journal: Economic Journal

Year: 2015

Volume: 125

Issue: 589

Pages: 1574-1615

Print publication date: 18/12/2015

Online publication date: 15/10/2014

Acceptance date: 17/04/2014

Date deposited: 13/03/2017

ISSN (print): 0013-0133

ISSN (electronic): 1468-0297

Publisher: Wiley-Blackwell

URL: http://dx.doi.org/10.1111/ecoj.12171

DOI: 10.1111/ecoj.12171

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