This study examines the economic and welfare e?ects of raising the number of high-skilled immigrants in Canada. It uses a life-cycle applied general equilibrium model with endogenous time allocation decisions between work, education, and leisure. According to the simulation results, raising the number of high-skilled immigrants would boost productive capacity and labour productivity but could lower real GDP per capita. In addition, by raising the supply of high-skilled workers, more high-skilled immigrants would reduce the skill premium and the return to human capital. This in turn would lower incentives for young adults to invest in human capital and have a dampening e?ect on the domestic supply of skilled workers. Finally, it is found that more high-skilled immigrants would be welfare enhancing for medium-and low-skilled workers but welfare decreasing for high-skilled workers.
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