Trade, variety, and immigration

What are the gains from international trade? And how do immigrants influence this process? We consider the case of Canada, document its experience with import variety growth in the period from 1988 to 2007, and relate this variety growth to the process of immigration. We find that import varieties grew 76%, that this growth is associated with a welfare gain to Canadian consumers as large as 28%, and that enhanced immigration flows may be responsible for 25% of this variety growth and its attendant welfare gains for native-born Canadians.

► Import varieties grew 76% in Canada from 1988 to 2007. ► This growth represents a welfare gain to Canadian consumers as large as 28%. ► Immigration flows may be responsible for 25% of this variety growth.