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Immigration has always been an important feature of Canadian labour market policy. The related forefront discussions include immigrants' possible contribution to a deterioration in labour market conditions, and fiscal pressures on government.
a) Some believe that immigrants displace native-born Canadians or put downward pressure on their wages. Using supply-and-demand analysis and the appropriate graphs, explain in theory how this might occur.
b) "An increase in the immigration of low-skilled workers has an unambiguously adverse impact on the wages of low-skilled native-born workers." Discuss the theoretical validity of this statement using a supply-and-demand framework. Include a diagram.
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