Reading this morning that Quebec (Canada) has a lower increase in GDP partially due to its lower immigration numbers. How does an increase in population positively affect GDP?
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GDP is an absolute number of the amount of goods and services produced in an area. Assuming immigrants produce literally anything they will increase GDP.
GDP is a measure of the total amount of goods and services produced in the particular area being measured. Because immigrants have to do things like eat food to survive, it’s almost impossible for immigration to do anything other than increase GDP. At least some of the goods and services they consume are produced in the area.
APerhaps it is worth pointing out the difference between GDP and GDP per capita. GDP per capita is the total amount of goods and services produced in an area divided by the number of people who live there. Immigrants almost have to increase GDP, but depending on the immigrant there’s a pretty good chance they will decrease GDP per capita, at least in the first few years after immigrating. As a rule of thumb, if you think a given immigrant will earn more money than the current GDP per capita, then they will cause GDP per capita to increase. If you think they will earn less money than the current GDP per capita, it will decrease. This is why almost every country prefers to admit highly skilled immigrants who are engineers or doctors or lawyers or any of a number of other professions. These immigrants will not only increase total GDP but are very likely to increase GDP per capita. What that means is that the other people in the area, who are producing the goods and services consumed by that immigrant, will benefit.
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