Are the gaps in labour market outcomes between immigrants and their Canadian-born counterparts starting to close?

Another important and good analysis from Statistics Canada, highlighting some improvement in economic outcomes from “two step” immigrations (temporary residents transitioning to permanent residency):

Earlier studies have well documented the expanding earnings gap between new immigrant workers and their Canadian-born counterparts during the 1980s and 1990s. However, significant policy changes in immigration selection and settlement have been introduced since the early 2000s, and the employment rate and entry earnings among new immigrants have been improving in recent years.

Little research has been undertaken to examine whether the earnings gap between new immigrant and Canadian-born workers has recently started to close. This paper compares the employment rate and the weekly earnings of immigrant and Canadian-born workers throughout the 2000s and 2010s. It is based on information from the censuses from 2001 to 2016 and information from the Labour Force Survey from 2015 to 2019. Analyses are conducted for new immigrants (in Canada for 1 to 5 years), recent immigrants (in Canada for 6 to 10 years) and long-term immigrants (in Canada for over 10 years).

Over the 2000-to-2019 period, the employment rate for new and recent immigrant men grew faster than for Canadian-born men, and the relative employment position of new immigrant women also improved slightly. The earnings gap between immigrant workers and Canadian-born workers with similar sociodemographic characteristics widened between 2000 and 2015, with both years posting similar national unemployment rates.

In the late 2010s, there was some improvement in the earnings gaps for immigrant men and women relative to their Canadian-born counterparts. This improvement may be related to the rising demand for labour during these years, since relative labour market outcomes for immigrants tend to improve during expansions and to deteriorate during contractions. It may also be related, in part, to the increased tendency to select economic immigrants from the pool of temporary foreign workers. This has been shown to improve both entry earnings and longer-term earnings.


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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