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When the first Chinese immigrants stepped on the land of Canada in 1788, they would not have imagined that two centuries later, people from their home country constitute the biggest visible minority over all other immigrant groups here in Canada (Statistics Canada 28). The story regarding those earliest immigrants from Macau (1) took place when the entire economy of ancient China did not own appreciation of international trade and cooperation, and this explains why no one even recorded their destiny after migrating to Canada. Compared to the notable truth that a lot of contemporary research focus has been concentrating on Chinese immigrants, especially during the past thirty years, clearly we can see that China is very actively interacting with Canada from both the perspectives of Economics, and beyond nowadays.
Through Facts and Figures 2008, Statistics Canada announces China as Canada's top immigrant source country with a prospective long-lasting growing trend. More importantly, previous Chinese immigrants have been creating their new generations in Canada. The Chinese Canadian community is growing each day, and it is the cause and effect of this phenomenon which attracts economists.
The purpose of this paper is to illustrate three interrelated economic models concerning human migration - the Harris-Todaro Model, the Human Capital Model, as well as the Job-search Model - and incorporate them into major historical observations of the Chinese immigration to Canada. Furthermore, this paper presents a cost-benefit analysis concerning the Chinese Canadians. The conclusion that the three models practically cooperate to explain the history of Chinese migration to Canada and migration is a two-side sword for Chinese immigrants should be well supported.
The next section provides information on the three well-illustrated migration models. The section following it brings a detailed discussion regarding the patterns of Chinese migration to Canada and implications of the three economic models to the degree that they explain the cause-and-effect relationship behind each main historical period. Afterwards, we will look at some insight brought up by more recent Chinese immigrants coming to Canada, with a focus on the past three decades.
The Harris-Todaro Model is primarily introduced by Todaro in 1969 . During the following year, Harris worked with Todaro together and reintroduced the Harris-Todaro Model (Khan 148). Their theory is based on the observation that rural workers keep migrating to urban areas even where unemployment rate is not low and seemed to persist in the near future. In order to solve this paradox, Harris and Todaro begin their illustration of this phenomenon using rural worker's expected wages they may earn after migrating, rather than absolute wage levels. The so-called Harris-Todaro Equilibrium is as follows:
where refers to the rural wage level, refers to the number of labours who currently are employed in urban areas, the total number of job-seekers including both unemployed and employed labours (labour force), and the urban wage level. Migration will take place in the direction from rural to urban if the left part of the equation above is smaller than the right part, vice versa, and discontinue if equilibrium is achieved (Harris & Todaro 128). The major challenge facing potential migrants is how to obtain information on all the four components of the equation and understand it correctly.
In 1962, eight years before the Harris-Todaro Model was introduced, Sjaastad brought economists' attention to factors shaping migration patterns other than economic benefits and costs, but psychic (Sjaastad 84). Providing implications for the Human Capital Model, Sjaastad proposes that migration can be simply viewed as the movement of human capital, which is of one of the production factors. Thus, she considers migration as investment as a form of capital flow. In Sjaastad's cost-benefit analysis, everything has been divided into two categories: money and non-money. If Harris and Todaro have paid sufficient attention to the former one, it is the latter one which needs to be taken into account. Although hard to quantify, the psychic costs, as Sjaastad argues, stands for any negative psychological experiences due to migration, including leaving life which they are used to another which they need to familiarize themselves with the brand-new environment. As a result, motivation for migration is based on differences between the following factors evaluated in the original place and those of the destination: real wages earned by working, as well as attractiveness (physical characteristics and emotional ties).
Inspired by Harris, Todaro, and Sjaastad, Yezer and Thurston looked into migration with an illustration of Job-search Model, incorporating all contributing factors discussed above into one. According to Yezer and Thurston, migration is not possible unless minimum real destination wage expected is promised to be satisfied. Let being the value of destination's attractiveness, being total costs of migration, the job searching time after migrating, the real origin wage, the needed minimum real destination wage, the favourable wage goal, the actual accepted wage after arriving at the destination, and T the total time expected to work after employed. The Job-search Model can be broken down into the following components:
varies directly with , , , and , but inversely with T;
For pessimistic migrants, , and the job-searching time is shorter;
For optimistic migrants, , , and the job-searching time is longer.
Ideally, a fixed will be achieved and a dynamic balance will be maintained, where all migrants own accurate perception of real wages of the destination (Yezer & Thurston 696).
From the East to the West
Before the feudal system was completely abolished in China, economic and social prosperity can be found in the Qing Dynasty. Due to that prosperity, the number of population welcomed its fastest growth and hit 430 million by the end of 1850, after which the earliest main wave of Chinese migration took place. When the Western countries opened the door of China seeking economic opportunities, a new era had begun.
Early Times: The Background of Chinese Migration to Canada
Apart from some political issues regarding what the Western countries had brought up when they established a variety of international treaties with the Government of Qing which stimulated economic interactions between China and the rest of the world, those Western countries did contribute some "push" and "pull" factors towards Chinese migration.
Dating back then, China was immensely dependent on the agriculture industry. However, only ten percent of total national land was arable. The ongoing population growth together with poorly dealt property right and land holding issues had resulted in a fairly low rural marginal production of labour (Wang 372).
Harris and Todaro have put rural wages in a purely competitive economic framework, and the rural wages are thus a direct reflection of the marginal production of labour (holding all other production factors constant: capital, land, technology, and entrepreneurship). Recalling the Harris-Todaro Model presented in the Theoretical Background section of this paper, a low rural marginal production of labour in the Chinese agricultural sector thus gives us a low value to the left part of the equation. This story told by China serves as a "push" factor.
When it comes to some "pull" factors originated in Canada, inevitably the coinage of the term "coolie" comes onto the picture. After 1893, Western countries, including Canada, wanted to substitute part of their slave labours with cheap immigrants. Hence, they abolished some treaties signed with the Government of Qing which set restrictions on Chinese migration heading to their countries (Wang 372). Having said that the wages paid to Chinese immigrants in Canada back then were low (probably half of wages of domestic white labours, and the workers were called coolies), migrating to Canada was still attractive to Chinese people because the high demand on the Canadian labour market for cheap Chinese labours represented a high employment rate, and giving a solidly high value of the right part of the Harris-Todaro equation. Obviously, potential Chinese migrants will come to Canada, and the logic behind that part of history can be simply explained using the Harris-Todaro Model.
1881-1884: The Construction of the Canadian Pacific Railway
Across the Pacific Ocean, the Province of British Columbia is certainly the first stop in Canada for Chinese migrants. Also, this province was the one which required a railway to be built from eastern Canada (well developed economic central regions along the St. Lawrence River) to B.C. Otherwise, they would not agree to sign the federal Constitution (Mackintosh 12). As in the great Canadian westward expansion, the construction of the railway was the core, and Chinese immigrants were one of the most important necessities which made that project a success.
Hired by Andrew Onderdonk in 1881, the contractor of the Canadian Pacific Railway project, 17,000 Chinese workers, immigrating mainly from Mainland China and the United States, joined the construction team (Wang 377). Since the part of the railway they were working on, Fraser Valley, was the toughest, 15,000 Chinese workers died due to illness and/or accidents.
Indeed, we can still apply the Harris-Todaro Model here. Nevertheless, it is reasonable to finish a cost assessment, which makes more sense as those Chinese people have been immigrating to Canada at a risk of their own lives. The non-money costs, as mentioned by Sjaastad, overwhelmed all other effects caused by migration in that remarkable page of history. Those Chinese immigrants came here for a better standard of living, starting from looking for a job. From worrying about their families back in China, suffering from negative emotional experiences caused by loneliness and the long time required to get themselves familiarized with the new environment, to preventing life loss, all constitutes costs other than what can be measured monetarily, not even to mention what had forgone because they have chosen to come to Canada (opportunity cost). These notable psychic costs are huge, and have attracted more and more attentions from scholars. (2)
1884-1947: The Head Tax and the Chinese Immigration Act, 1923
The cheap price of hiring Chinese labours became a threat facing Canadian domestic white labours. In addition, as approaching to the end of the railway construction, demand for Chinese labours had dropped down, while the supply still increasing, leading to an even lower equilibrium wage for Chinese labours in the labour market of Canada. In reaction to this trend, the Federal Government of Canada implied a Head Tax onto per Chinese immigration entry.
The Head Tax was $10 per immigrant back in 1884, and it was raised up to $500 per immigrant in 1904. If we draw the conclusion that the Head Tax policy effectively reduced the amount of incoming Chinese immigrants, then the Chinese Immigration Act came into effect in 1923 almost totally prevented all Chinese migrants from coming into Canada. The Act is commonly called the Chinese Exclusion Act (Wang 378). From 1926 to 1945, only seven Chinese people immigrated into Canada (see Figure 2 by the end of this section).
Being aware of all possible money and psychic costs but still with unchanged purpose of achieving a better standard of living, indeed Chinese people did not stop migrating to Canada immediately after the introduce of the Head Tax. This interesting phenomenon cannot be thoroughly understood unless we look at both the Harris-Todaro Model and the Human Capital Model at once-the Job-searching Model.
If we consider the relatively low marginal production of labour (or real wage levels) in China has "pushed" people to Canada, Yezer and Thurston's Job-search Model gives insight for how we fully understand what motivates Chinese people to migrate. It is impossible to forget that Head Tax was imposed right next to the disaster of life loss experienced by previously migrated Chinese workers. Such severe physical and psychic costs should have dampened potential migrants' confidence. With Head Tax as another political concern, interestingly there are still Chinese people coming to Canada. Expected to be treated badly, not to be hired at a well-paid position, and even to face the effects caused by the Great Depression coming from the United States, immigrants with pessimistic psychology, according to the Job-search Model, are actually able to find a job faster than previous immigrants with optimistic expectations.
Getting a job within a short period of time is vital as it remarks one's start of his or her new life in Canada. As time passing by, these immigrants will incorporate themselves deeper into their communities, which give them better perception of local average real wage levels and standard of living. By then, they may be economically and psychologically ready heading to a better job, and surely a better life experience in Canada, with upcoming money and non-money benefits.
From 1945: The Post-WWII Period
The foundation of a new China - People's Republic of China - took place four years following the end of the Second World War (WWII). After suffering from the War, both China and Canada were in need of economic and social recovery.
Although some political uncertainties have been arisen due to the establishment of the PRC, China's growing power in the global economy has stimulated opportunities for it to cooperate with Canada. On the other hand, Canada started to strongly "pull" more Chinese newcomers, thanks to the largely reduced effects of racism and discrimination of immigrants, the newly introduced 1967 Point System (3) in Canada (Statistics Canada 2). The Chinese immigration to Canada had been growing steadily since then, though with fluctuations (refer to Figure 2 by the end of this section), seeking educational opportunities, business potentials, and support from other Chinese immigrants who had been in Canada for a long time.
1978-2008: Taking on a Contemporary Perspective
Starting from 1978, Xiaoping Deng (4) brought China deep into the global arena and China has been undergoing rapid change, both with its two Macao Special Administrative Regions - Hong Kong and Macau - and the rest of the world.
(Source: Wang & Lo, Chinese Immigrants in Canada: Their Changing Composition and Economic Performance, 2005, p.43)
Through Wang and Lo's paper, Chinese Immigrants in Canada: Their Changing Composition and Economic Performance, and still making sense of data using discussed economic models, five essential observations can be made:
Another huge boom (the first boom occurred right after Canada's liberalization of immigration policy in 1967, consult Figure 2) of incoming Chinese immigrants began in mid-1980s in accordance with the increase in demand for labours in the Canadian labour market;
The major source region of Chinese immigrants has changed from Hong Kong to Mainland China, especially during 1990s. Despite the economic factors shaping this change, political uncertainties in Hong Kong dating back to its official return to China in 1997 contributed this specific pattern as well. That is to say, political issues are capable of "pushing" prospective Chinese migrants to set off their journey, and promising economic conditions will make them better off after migrating, no matter they are from Hong Kong before, or Mainland after;
The primary motivation for migrating to Canada changed from seeking education to jobs. Before it went into the 21th century, Canadian employers were experiencing difficulties in realizing the education credentials of those newly came job-seekers, thus Canadian education was once "pulling" Chinese people to receive qualifying skills suitable for their intended job positions. Certainly they would enjoy concrete benefits;
The distribution of Chinese immigrants is more concentrated on some specific regions of Canada, namely Vancouver and Toronto (Statistics Canada 27). Even if they choose to reside somewhere else and start a business, local Chinese communities would then be their target customers. As these sort of ethnic identities are getting built, more Chinese people will be attracted because of these cultural "pulling" factors. More importantly, they are able to enjoy such a psychic benefit;
Close interactions with hometown. China did not suffer from the latest world depression severely, thanks to its huge market. As China is getting more deeply connected with the entire global market, immigrants to Canada are sure to take advantages of international economic linkages, whether they are "pushed" by global needs from a domestic company, or "pulled" by a Canadian branch of a multinational corporation they are working for.
For better illustration, a diagram showing the number of Chinese immigrants coming to Canada during each five-year period from 1886 to 1975 has been given. The general migration pattern can be seen quite clearly when comparing our discussion above (especially points 1 through 4) with the trend depicted below.
(Source: Tan & Roy, "The Chinese in Canada", 1991, p.9)
Solid conclusion can be drawn after a detailed discussion presented above. Without doubt, the Harris-Todaro Model is found to stand. As an extension to that, Sjaastad's unique cost-benefit framework perfectly takes on non-money analysis missing in the Harris Todaro Model. Incorporating both of them, Yezer and Thurston bring a practical application entitled the Job-search Model and make it possible to look into the time before and after Chinese immigrants find a job. After all, through integrating all the three models, we can see that the costs and benefits cannot be exhibited from one single aspect and that is why decision-making is tough and potential Chinese immigrants can be trapped into a dilemma.
Unfortunately, our observation and analysis are largely based on simple economic indicators, rather than detailed historic data and/or figures. Also, the implication of marking ancient China as a rural economy compared to Canada as an urban industrialized economy indeed allows us to apply the Harris-Todaro Model, but the relationship between intra-nation and inter-nation migration has not yet explained well. Further research studies can be carried out, aimed at overcoming these two drawbacks, and present a comparison among all the five periods listed in the discussion section, in order to unearth more interesting findings.
Chinese is referred as a cultural term here. Generally, Chinese immigrants come from a variety of different source countries/regions. Otherwise indicated, this paper has limited all the countries/regions to the following main two ones: Mainland China and Hong Kong.
Although the psychic costs are indeed huge, it is not ignorable that there were still Chinese immigrants coming into Canada. This could be due to their lack of knowledge of these psychic costs, they consider money factors more rather than non-money ones, and the difficulties in quantifying those psychic costs.
The following two sentences are found in the document Facts and Figures 2008 presented by Statistics Canada:
"1962: new immigration regulations are tabled to eliminate all discrimination based on race, religion and national origin";
"1967: the government amends Canada's immigration policy and introduces the point system for the selection of skilled workers and business immigrants" (Statistics Canada 8).
Xiaoping Deng is commonly considered as one of the greatest contributor to the contemporary development of China. His two major contributions are: the introduction of the Reform and Open Policy in 1978, and the philosophy of one country but two systems which welcomed the return of Hong Kong and Macau to People's Republic of China in 1997 and 1999, respectively.