Immigration and internal mobility in Canada

We analyse the impact of temporary foreign workers (TFWs) and permanent immigrants on interprovincial mobility in Canada. Empirical results are analysed through the lens of a theoretical model that incorporates a job-matching framework in a migration model à la Harris and Todaro. The effect of the inflow of TFWs in interprovincial mobility is negative, substantial and significant. This is not the case for the inflow of permanent immigrants selected through the Canadian point system. The robustness of these empirical results to issues of endogeneity is assessed through a classical instrumentation approach as well as through a diff-in-diff analysis taking advantage of a pilot project facilitating the admission of TFWs in two Western provinces over the 2007–2010 period. Our paper suggests that, in general, the impact of immigration on labour market conditions depends critically on the way immigration policy is set.