Geoscience Reference
In-Depth Information
5.00
4.50
4.00
3.50
3.00
2.50
Ageing only
0.6% immigration
1.2% immigration
1.5% immigration
2.00
1.50
1.00
0.50
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
0.0%
0.6%
1.2%
1.5%
Fig. 11.9
Impact of immigration on Chicago gross regional product
Figure
11.9
shows how the gross regional product would be changed by different
immigration streams over time. An increase in immigrants appears to have more
positive impacts on regional output growth. For example, in the case of the
maximum contribution by the most favorable policy (Scenario 3), the Chicago
region appears to grow annually by 0.9 % between 2005 and 2070, while without
immigration it will face negative growth (
0.2 % per year) over the same period
due to ageing population. This result can be fully expected because immigration
provides a positive labor supply shock to the local economy.
However, the transitional profile of per capita GRP (Fig.
11.10
) is not similar to
that of aggregate GRP as shown in Fig.
11.1
. During the initial period, relatively
larger immigration, in Scenarios 2 and 3, keeps the per capita GRP remaining at a
lower level than that of the baseline case because the immigration increases
(by assumption) only the supply of low skilled workers. However, after the
2030s, when the first immigrants really begin to acquire higher levels of productiv-
ity, per capita GRP has an upward trend and grows faster than the baseline case.
This positive trend also substantially contributes to reducing the decline of per
capita GRP under ageing population. For example, between 2005 and 2070, the
negative 5.5 % per capita GRP growth under an ageing population is reduced to,
ranging from negative 2.6 % in scenario 1 to negative 1.9 and negative 1.2 % in
scenario 2 and 3, respectively. The national GRP share of the Chicago region
noticeably increases from 3.0 % to around 3.5 ~ 4.0 % in Scenario 2 and 3 because
both scenarios assume relatively higher share of immigrants are admitted only in
the Chicago region.
The projected effect on the social security tax rate is shown in Fig.
11.11
. Not
surprisingly, a larger number of working-age immigrants appears to have a signifi-
cant downward impact on the social security tax rate. Thanks to this downward
pressure, in 2050, the social security tax rate is projected to return to the level
established before the impacts of an ageing population. This is one of the most
