International students aren’t making as much money as their Canadian classmates in the first years after graduation, report suggests

Significant study on the importance of work experience:

Despite equal Canadian education credentials, international students earn less than their Canadian peers after graduation, Statistics Canada says.

That’s because they fail to secure enough local work experience before they graduate, data from the agency indicates.

International students earned “considerably” less than domestic students during their first five years after graduation, said a report released Wednesday in collaboration with Immigration, Refugees and Citizenship Canada.

“Fewer years of pre-graduation work experience and lower levels of pre-graduation earnings among international students accounted for most of their observed disadvantage in post-graduation earnings.”

This revelation will be crucial for Canada to address as the federal government has increasingly drawn on its pool of international students as future immigrants. In 2019 alone, more than 58,000 international graduates successfully applied to immigrate permanently.

They are favoured over immigrants who are traditionally selected directly from abroad because they’re generally younger and have more years to contribute to the labour market after immigration. There is also less uncertainty about their quality of education and language ability, and little barrier related to credential recognition when joining the labour force.

Based on Canada’s Post-secondary Student Information System and tax data, researchers compared early labour-market outcomes and sociodemographic information of international students and domestic students who graduated from post-secondary institutions between 2010 and 2012.

International students comprised six per cent or 66,800 of the sample, with Canadian citizen and permanent resident students accounting for 87 per cent and seven per cent of the population (about 927,700 and 71,900), respectively. The classification was based on the students’ immigration status at their time of graduation.

Overall, 43.6 per cent of international students had no Canadian work experience prior to graduation, compared with 2.2 per cent of Canadian citizens and 9.7 per cent of permanent resident students.

The average number of years of pre-graduation work experience was 6.2 for Canadian citizen students, 3.9 for permanent resident students and just 1.2 for international students.

Four in 10 domestic students earned more than $20,000 in a year before graduation, whereas only one in 10 international students did so.

One year after graduation, the income gaps between international graduates and Canadian citizens were larger for graduates with an advanced degree than for their international peers with a lower education. The difference was about 10 per cent for bachelor’s degree holders and 40 per cent for the ones with master’s degrees.

However, by the fifth year, the gap narrowed for international students with graduate degrees, while it increased over time for their peers with a bachelor’s degree or college diploma only.

International students had lower earnings on average than domestic students in many fields of study, with a few exceptions where they had similar earnings: visual and performing arts, and communications technologies; humanities; health and related fields.

For the four most popular fields of study among international students, graduates from the STEM fields (architecture, engineering and related technologies; and mathematics, computer and information sciences) suffered a smaller earnings gap than their non-STEM peers in business, management and public administration; and social and behavioural sciences and law.

The disadvantage faced by international students in securing pre-graduation work experience can be explained by language proficiency, cultural differences, concentration in fields of study, course grades, employers’ reluctance to recruit and train job applicants with temporary residency status, and possible employer discrimination, the study suggested.

“International students may face these barriers when looking for a job while studying, before they formally enter the labour market, and after they graduate,” it said. “Another possible answer is the difference in participation rates between domestic and international students in work-integrated learning (which) provides participating students the benefits of workplace-related skill accumulation and connections to potential employers.”

International students lack knowledge about the local labour market, have limited local networks, and face financial barriers, such as relocation costs and the additional tuition fees required for delayed graduation — all contributing to their lower participation in internship and co-op, said the report.

Although the federal government has relaxed the off-campus employment rules for international students during school year since 2014 by allowing them to work up to 20 hours a week without requiring a work permit, they still have limited access to government-sponsored student hiring programs where priorities are given to Canadians.

“The disadvantage for international students in pre-graduation work experience hampers their ability to compete for a high-paying, high-quality job after graduation,” said the report.

“The results of this study imply that policies to reduce the pre-graduation work-experience gap are crucial to reducing the post-graduation earnings gap between international and domestic students.”

Source: International students aren’t making as much money as their Canadian classmates in the first years after graduation, report suggests

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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