‘Colour-coded’ retirement security: Study finds economic marginalization and inequity follow people into old age

Not surprising but useful confirmation:

Indigenous and racialized seniors have much lower retirement incomes and higher poverty rates than their white counterparts, which a new study says reflects how economic marginalization and inequity follows people into their old age.

Overall, white Canadian seniors enjoy the most retirement security with an average yearly income at $42,800, way above the $32,200 for their peers in the Indigenous communities and $29,200 for visible minorities over the age of 65.

Based on 2016 census data, the report by the Canadian Centre for Policy Alternatives found 13.7 per cent of white seniors lived in poverty compared to 21.5 per cent among Indigenous seniors and 19.8 per cent among racialized seniors, according to the Low Income Measure After Tax or LIM-AT.

Hence, it’s not surprising that seniors from marginalized groups have to count on public pensions and benefits to make up for lagging retirement incomes, says the study, titled “Colour-coded Retirement,” released Wednesday.

“The data reveal that there are real consequences of economic marginalization and systemic racism. Elders and seniors are financially insecure in retirement, if they can retire at all, because the opportunities for saving are so limited,” says Hayden King, a report co-author and executive editor of the Yellowhead Institute, a First Nation-led research centre.

Senior white Canadians, who made up 85 per cent of the senior population in the country, have the most diverse sources of income of all groups.

About a third of their income comes from public pension sources such as the Canada and Quebec Pension Plans, Old Age Security (OAS), and the Guaranteed Income Supplement (GIS); a third from retirement contributions to work and individual pension plans; and the rest from investment and employment earnings as well as other sources.

In comparison, public pension accounts for 47 per cent of Indigenous seniors’ and 40 per cent of racialized seniors’ retirement income, respectively.

These two groups — accounting for 14.8 per cent of the population over age 65 in Canada — had less money to draw from their employers’ pension plan and own retirement savings, or investment income. They were more likely to rely on employment income.

RPPs and RRSPs account for a third of white seniors’ retirement income, versus 25 per cent for Indigenous seniors and 21 per cent for racialized seniors.

On the whole, racialized Canadian households have less spare money to contribute to those plans than white Canadian households. And when they do, their contributions are lower.

Chinese households were an exception with an average contribution of $10,000 in 2015, which was higher than the $7,600 contribution made by white households. In comparison, Black families only made a $4,600 average contribution.

“The overall low share of the racialized and Indigenous population that contribute to RPPs points to reduced retirement security for the next generation of workers,” the report warned.

Among racial minority groups, retirement incomes also vary among those who were born in Canada versus those who are immigrants.

While only 3 per cent of Chinese seniors and 1 per cent of South Asian seniors are Canadian-born, their average retirement income is higher than their immigrant peers.

In the case of Black Canadians, however, being Canadian-born offers no income advantage.

“Canadian-born Black seniors’ income is virtually identical to that of Black immigrants, with the result that Canadian-born Black seniors’ average income continues to be 25 per cent lower than Canadian-born white seniors’ income,” said the report.

“This provides us with insight into the continuing impact of anti-Black racism on seniors’ income.”

The study also shows the differences between First Nations, Métis and Inuit seniors’ income, as well as their respective contributions to RPPs and RRSPs.

First Nations seniors have the lowest average income of any Indigenous group, at $33,500 for men and $26,300 for women, followed by their Inuit ($39,900 and $32,150) and Métis ($41,765 and $28,285) counterparts. Métis seniors were most likely to contribute to private pension and retirement savings plans, while their First Nations peers had the lowest participation rate.

Researchers said there is also a consistent gender gap with senior women of all demographic backgrounds having lower retirement incomes and higher poverty rates than senior men.

The study found the overall racialized senior population’s total income averaged $33,900 for men and $25,000 for women. While visible minority male seniors’ average income is 36 per cent lower than their white male counterparts, senior racialized women’s average income is 26 per cent below their white female peers.

“It is only when the economic impacts of underlying racism and sexism are addressed that we will achieve equal access to a secure retirement for all,” said the 49-page report, funded by the Canadian Race Relations Foundation

It said the data shows that GIS and OAS pension — both adopted as anti-poverty measures — are crucial sources of income for senior women who are First Nations or racialized immigrants.

The increase in OAS by the federal Liberal government for those 75 and older in the 2021 federal budget is a step in the right direction to narrow retirement income disparities, said the study.

It recommends measures to eliminate barriers to equitable employment opportunities and increased access to workplace-based pension plans and retirement savings

Source: ‘Colour-coded’ retirement security: Study finds economic marginalization and inequity follow people into old age

Are golden visas a golden opportunity? Assessing the economic origins and outcomes of residence by investment programmes in the EU

Good detailed study. Money quote: “our analysis suggests that wealthy investor migrants may be better conceptualised as mobile, profit-oriented populations akin to tourists and businesspeople, rather than as long term-oriented immigrants.” Conclusion below:

The twentieth century saw a remarkable shift from screening new immigrants based on racial origins to screening based on human capital contributions (Joppke 2005; FitzGerald and Cook-Martín 2014). The spread of RBI programmes in the twenty-first century adds a new dimension: screening new residents by economic capital contributions only. The results of this investigation suggest an upper limit on Ellerman’s (2019) finding that western countries now devalue the economic offerings of foreigners when selecting new members. In contrast to the policies aimed at workers that she examines, here we see that countries are indeed supplying pathways to long-term residence and citizenship for those making economic contributions – as long as they are very sizeable. Notably, the injections are one-off and the new residents are not expected to continue to contribute to economic growth in the same way that migrant workers might; they must simply maintain the original investment. The trend suggests a short-term calculation on the part of states, seeking to plug economic gaps, as our analysis finds, rather than a longer-term orientation of crafting a middle-class national identity (cf. Elrick and Winter 2018; Ellerman 2019). If social capital (Portes 1998), human capital (Stark, Helmenstein, and Fürnkranz-Prskawetz 1998; Ellerman 2019), and ethnic capital (Mateos and Durand 2012; Kim2018) have captured the attention of social scientists analysing migration, the developments tracked here suggest that a renewed focus on economic capital may be warranted. We find that states continue to harness mobility policies in service of economic objectives, now in a more starkly transactional manner, and – as we show – no matter what the political orientation of the government may be.

If RBI programmes are becoming an increasingly popular policy option, not all countries see the same uptake. Demand in Europe is concentrated in a handful of pro- grammes: just four countries represent 75 percent of all investor residents. The programmes now bring nearly €3.5 billion to the Union annually, yet the economic benefits are uneven. Indeed, only in two countries, Latvia and Portugal, are the economic injections large enough to represent a significant proportion of FDI. However in no country do they represent a substantial proportion of GDP, suggesting that concerns about macroeconomic destabilisation are unwarranted.

Our analysis reveals that economic decline leads to a greater likelihood that countries will start programmes, and that if the economic decline occurred during the Eurocrisis, the likelihood is yet greater – an argument proposed but not demonstrated by the literature (e.g. Parker 2017; Holleran 2019; Dzankic 2018; Veteto 2014). The choice of investment options, too, is largely responsive to economic need when governments implement real estate and business investment options, though not government bond options. Furthermore, the spread of programmes itself does not lead to more programmes: there is no contagion effect. As such, driving the onset of RBI programmes is more than mere client politics or neo-liberal ideology (cf. Mavelli 2018); economic need is a significant factor behind them. However, investors may stymie government intentions to use programmes to boost several areas of the economy, for they overwhelmingly invest in real estate if given the option.

Furthermore, our analysis suggests that wealthy investor migrants may be better conceptualised as mobile, profit-oriented populations akin to tourists and businesspeople, rather than as long term-oriented immigrants. The results lend support to qualitative work that identifies such mobile populations as ‘flexible citizens’ (Ong 1999), who use investment to multiply their options and secure additional bases, rather than to pack up and immigrate or invest in a growing economy (see also Ley 2010; Surak 2020a). We also find that countries with strong tourism sectors can charge more for their programmes as well. Yet they are not merely profit maximisers, choosing a price that will attract the most applicants; they respond to internal issues too, changing price in accordance with economic growth and employment rates.

A number of analysts have raised warning flags that investor migrants may price locals out of real estate (Scherrer and Thirion 2018; Holleran 2019). Our analysis shows the concern is unwarranted: the proportion of RBI real estate transactions in the national market is miniscule in nearly all cases. Notably, these programmes attract more distant and often ‘browner’ others than the fellow Europeans who constitute the greatest proportion of foreign real estate buyers and raise less media hype, suggesting that xenophobia may lie behind the concern. Greece is the sole, but significant, exception where the scale of the programme could indeed destabilise the property market. As real estate investment tends to be concentrated in specific locales (Friedland and Calderon 2017; Viesturs, Pukite, and Nikuradze 2017), regional and city-level data are necessary to further identify whether more limited destabilisation is occurring in particular areas.

What has been the impact of Covid-19 on these programmes? The sudden hardening of borders across the world has sent many wealthy people looking for ways to hedge their risks by securing mobility options and a Plan B (Surak 2020b, 2020c). To date, as we show, national-level healthcare statistics have been insignificant, but Covid-19 may encourage wealthy investors to select countries that have handled the pandemic well or that offer state-of-the-art healthcare. Covid-19 may also bring a shift away from a short-term ‘tourist-like’ calculation to a medium-term calculation preferring a place for longer-stint stays.

Regarding supply, Covid-19 is likely to increase the attractiveness of RBI programmes as a way to draw in foreign investment. Our study found that countries are more prone to start programmes after a period of slowed economic growth, particularly after a systemic recession. If the economic downturn spurred by the pandemic continues, it is likely that new countries will start their own programmes, replicating the pattern we found, and that countries with RBI offerings already in place will attempt to develop them further to address deepening economic need. Even if the schemes to date have been small, they still offer a means to attract additional resources at little cost. With real estate the most popular qualifying option, the investment boost is likely to be concentrated in the property and construction sector, which itself is transforming as the pandemic reconfigures work patterns and the desirability of urban living. Even if the European Commission continues to call for ending the programmes, countries are more likely to adapt their RBI offerings – perhaps by shifting them closer to, or even transforming them into, entrepreneurial options – rather than do away with them entirely.

Source: https://www.tandfonline.com/doi/full/10.1080/1369183X.2021.1915755

La parité en emploi n’est pas encore acquise pour les immigrants

Good critique and discussion regarding Jean-François Lisée column arguing that parity has been achieved and Lisée’s response:

Dans sa chronique du 1er mai, M. Jean-François Lisée soutient qu’au Québec, les immigrants et personnes des minorités racisées ont atteint la parité avec les personnes nées au Canada concernant leur situation sur le marché du travail. En s’appuyant sur le dernier rapport sur l’état du marché du travail de l’Institut de la statistique du Québec (ISQ 2021), il conclut que, bien que des progrès soient encore nécessaires, les immigrants et membres des minorités visibles sont des « Québécois à part entière » pour ce qui concerne leur intégration professionnelle.

Bien que nous souhaiterions qu’il en fût ainsi, des recherches sur le sujet et un examen des données contreviennent à de telles interprétations.

En premier lieu, relativement à la participation au marché du travail, M. Lisée soutient que la présence en emploi des personnes immigrantes dépasse celle des natifs. Qu’en est-il exactement ? Les économistes retiennent habituellement deux indicateurs pour mesurer la participation au marché du travail : le taux d’emploi (proportion de personnes en âge de travailler ayant un emploi) et le taux de chômage (proportion de personnes en âge de travailler à la recherche d’un emploi). Pour ce qui concerne le taux d’emploi, en 2020, bien qu’il soit effectivement supérieur pour les immigrants, il chute de façon très importante chez les immigrants ayant une période de résidence au pays de 5 à 10 ans en comparaison à celui des personnes nées au Canada (-5,8 % contre -3,7 %). Ces données illustrent un phénomène amplement démontré : en période de crise, les personnes immigrantes perdent davantage leur emploi que les personnes nées au Canada. Cela signifie que les gains en termes d’égalité mentionnés par M. Lisée restent fragiles lorsque le contexte économique change. Peut-on alors parler de réelle égalité sur le marché du travail ?

Concernant le taux de chômage, le portrait est plus nuancé encore : en 2020, si le taux de chômage de l’ensemble des immigrants est effectivement supérieur de 2,5 % à celui des natifs, il est en revanche supérieur de 8 % chez les immigrants très récents (16,6 % contre 8,3 %) et près d’une fois et demie supérieur chez les immigrants récents (11,5 % contre 8,3 %). Ces chiffres restent malheureusement conformes aux tendances déjà décrites il y a 30 ans par le sociologue Jean Renaud : à terme, les immigrants « sont d’ici » (pour reprendre le titre de son article paru dans les années 1990), mais cela leur prend 10 ans ! Peut-on, là encore, parler de pleine égalité sur le marché du travail ?

En second lieu, M. Lisée soutient que la discrimination salariale envers les immigrants a presque disparu. Or, les chiffres montrent là encore qu’il faut 10 ans aux personnes immigrantes pour rejoindre la rémunération horaire des personnes nées au Canada. Les immigrants arrivés depuis 5 ans ou moins gagnent 88 % du salaire horaire des personnes nées au Canada. Or, ce chiffre masque une réalité plus troublante encore : les personnes immigrantes admises au Québec sont nettement plus diplômées que les personnes nées au Canada et elles sont sélectionnées sur le critère de l’expérience professionnelle dans leur pays ! Cette rémunération plus faible signifie donc que leurs qualifications et expériences acquises à l’étranger ne sont pas reconnues. C’est la démonstration la plus évidente de l’existence d’une réelle discrimination envers les immigrants sur le marché du travail.

Enfin, M. Lisée examine la situation des personnes issues des minorités visibles et conclut, là encore, à l’égalité. Or, les données de l’ISQ révèlent que la participation des minorités visibles sur le marché du travail est beaucoup plus sensible à la conjoncture économique que celles des personnes qui n’appartiennent pas à ces groupes. Leur taux de chômage s’élève à 18 % en juillet 2020 (contre 7,5 % pour les personnes non autochtones ou pour les minorités visibles), c’est-à-dire au plus fort de la crise, et diminue à 10,5 % (contre 6,6 %) au moment de la reprise économique en mars 2021. Les personnes des minorités visibles ont donc (comme les immigrants) une situation économique bien plus dépendante de la conjoncture économique — et donc précaire — que les personnes qui n’appartiennent pas à une minorité racisée.

La pleine participation économique des immigrants et membres des minorités visibles n’est malheureusement, au Québec, ni réalisée ni acquise, loin de là. Une lecture attentive des données démontre que le marché du travail reste hautement discriminatoire envers ces personnes. Comme M. Lisée le souligne, « la lutte pour l’égalité entre tous les Québécois est un fait essentiel de notre vie contemporaine ». Reste qu’il est trop tôt pour célébrer la victoire : sur le marché du travail, le défi de l’égalité de tous et toutes est encore à relever.

***

Réponse du chroniqueur :

Merci pour cette contribution utile. Cependant, l’ensemble des débats publics récents sur l’immigration laissaient l’impression que les écarts entre les immigrés et les autres Québécois étaient scandaleux. Ce n’est plus le cas. Ma chronique a mis en lumière cette information généralement inconnue qu’en moyenne, pour la participation à l’emploi et pour la rémunération, l’égalité est enfin atteinte chez nous et que la situation est supérieure à ce qui prévaut en Ontario, et encore davantage pour les femmes immigrées.

Vous avez raison, lorsqu’on s’éloigne de la moyenne et que l’on procède à des découpes plus fines, on peut retrouver des écarts qui, lorsqu’ils seront comblés, donnent des raisons supplémentaires de réjouissance. Permettez-moi en retour de chipoter sur votre utilisation du taux de chômage pour 2000, puisque l’an dernier, la proportion d’immigrants de moins de 5 ans en emploi était supérieure (102 %) à la proportion de natifs. Le fait que davantage de ces immigrants soient, en plus, en recherche d’emploi signifie simplement qu’ils sont encore davantage intéressés par le travail que les autres Québécois. C’est tout à leur honneur, mais ce n’est pas une indication que les portes de l’emploi leur sont fermées.

Bien cordialement,

– Jean-François Lisée

Source: La parité en emploi n’est pas encore acquise pour les immigrants

Longitudinal Immigration Database: Immigrant children and census metropolitan area tables, 2018

Encouraging analysis showing good economic outcomes for children of immigrants (those who arrived under 15 years of age). Would be interesting to have a breakdown by visible minority group as well:

The most recent 2018 data from the Longitudinal Immigration Database (IMDB) indicate that immigrant children make a significant contribution to Canadian society and the Canadian economy over time. Although immigrant children (32.2%) are more than twice as likely as non-immigrant children (15.4%) to live in low-income households, factors such as the opportunity to be educated in the Canadian system and an increased proficiency in the official languages help immigrant children attain wages in adulthood similar to those of their Canadian-born peers.

This analysis connects the characteristics of immigrants who came to Canada as children with their adulthood socioeconomic outcomes in 2018, such as participation in postsecondary education and median wages. The IMDB provides a long-term perspective on immigrants and their socioeconomic outcomes in Canada, offering details on how immigration is shaping Canada’s future. In addition, these data from 2018 contribute to baseline estimates in preparation for future research on the impact of the COVID-19 pandemic on immigrant children, including immigrant children admitted during the pandemic, their adjustment period and their long-term socioeconomic outcomes in adulthood.

Immigrants who came to Canada as children are more likely to participate in postsecondary education than the overall population

In 2018, 70% of 20-year-old immigrants who were admitted to Canada before the age of 15 participated in postsecondary education, according to tax data. This compares with 56% of the overall population of 20-year-olds in the same year.

Similar to the overall Canadian population, the median wage of immigrants who were admitted as children increased with age. In 2018, 25-year-olds in the overall population had a median wage of $29,710, compared with $30,300 for 25-year-old immigrants admitted as children. For 30-year-olds, the median wage was $41,810, compared with $47,400 for 30-year-old immigrants admitted as children. This represents a 13.4% difference in the median wage between the 30-year-olds in the total population and 30-year-old immigrants admitted as children. 

Children admitted to Canada with economic immigrant families report higher postsecondary education participation than Canadians overall or immigrants admitted under other categories

Many factors influence the socioeconomic outcomes of immigrant children in adulthood, including the conditions under which they were admitted to Canada. Economic immigrants, selected for their potential to contribute to Canada’s economy, tend to have a higher median wage than refugees, who are fleeing persecution or conflict, or immigrants sponsored by family already living in Canada.

Immigrant children who were admitted as dependants of economic immigrants are likely to benefit from the higher median wage of the principal applicant in the economic immigrant category. Among children admitted in economic immigrant families, 75% of those who were 20 years old in 2018 reported postsecondary education participation. This compares with 60% for children admitted in sponsored families, 51% for refugees and 56% for the overall population of the same age, in the same year.

Chart 1  
Postsecondary participation of immigrants admitted to Canada as children and of the overall population, by age and admission category, 2018

Chart 1: Postsecondary participation of immigrants admitted to Canada as children and of the overall population, by age and admission category, 2018

At age 30, immigrants who were admitted to Canada before the age of 15 with economic immigrant families report the highest wages compared with those admitted under other categories

Lower participation in postsecondary education can lead to earlier labour market entry. Until the age of 23, people admitted as children in sponsored families, refugees and the overall population had higher wages than their economic immigrant counterparts. At this age, immigrants admitted as children in sponsored families had median wages of $19,200, compared with $19,000 for immigrants admitted as children in refugee families, $21,300 for the overall population, and $18,900 for people admitted as children in economic immigrant families.

However, beginning at the age of 24, a time when many have completed their postsecondary studies, the wages of people admitted as children in economic immigrant families began to surpass those of their counterparts in other admission categories and the overall population, and they continued to increase at a steeper rate over time compared with the other categories.

At the age of 30, in 2018, people admitted as children in economic immigrant families had median wages of $52,400. This compares with $41,600 for immigrants admitted as children in refugee families, $40,100 for immigrants admitted as children in sponsored families, and $41,810 for the overall population.

Chart 2  
Median wages of immigrants admitted to Canada as children and of the overall population, by age and admission category, 2018

Chart 2: Median wages of immigrants admitted to Canada as children and of the overall population, by age and admission category, 2018

Immigrant women admitted to Canada as children have higher postsecondary education participation than men

In 2018, 74% of 20-year-old immigrant women admitted as children reported participating in postsecondary education. In comparison, participation rates were lower among immigrant men (65%) who also came to Canada as children. At 74%, the participation rate of immigrant women who came as children was also higher than the rate of the overall female population (62%) and the overall male population (50%) of the same age. 

With regard to wages, 30-year-old immigrant women admitted to Canada as children had median wages of $43,300, 48% more than those of 25-year-old immigrant women admitted as children ($29,200). However, their median wages were lower than those of immigrant men who also came as children ($51,900) and of the overall male population ($48,850) of the same age. These gender income differences are in line with those in previous studies that found that women with a similar level of education as men report lower income.

Nonetheless, the median wages of 30-year-old immigrant women admitted as children were higher than those of the overall female population ($35,280), who earned the lowest median wages.

Chart 3  
Median wages of immigrants admitted to Canada as children and of the overall population, by age and sex, 2018

Chart 3: Median wages of immigrants admitted to Canada as children and of the overall population, by age and sex, 2018

These new data will facilitate further analysis of other factors that can affect the future adulthood socioeconomic outcomes of immigrants admitted as children, such as their age at immigration, year of immigration and their incidence of living in a low-income household during childhood.

In addition to the table about the economic outcomes of immigrants admitted to Canada as children used in the analysis above, tables on the income and mobility of immigrants by census metropolitan area are now available. These tables use data from the IMDB.

Source: https://www150.statcan.gc.ca/n1/daily-quotidien/210322/dq210322c-eng.htm?CMP=mstatcan

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

Outcomes of STEM immigrants in Canada and the U.S.

Good overview of this study, showing that overall STEM immigrants do worse in Canada than the USA, with Statistics Canada providing possible explanations:

Immigrants make up a large share of university-educated workers in STEM fields in both Canada and the U.S., and a recent study looked into which country sees better outcomes for immigrants in these sectors.

The Statistics Canada study looked at the economic outcomes of immigrants age 25 to 64 who had at least a bachelor’s degree in a STEM— science, technology, engineering, mathematics—field. In Canada, the data is from 2016, while U.S. data is from 2015 to 2017.

In general, U.S. immigrants saw better outcomes.

In both countries, immigrants with at least a bachelor’s degree were twice as likely as the native-born population to have studied in a STEM field. They were also three times as likely to have studied engineering, computer science, and math.

In terms of occupational outcomes, more than half of STEM-educated immigrant workers in both countries held non-STEM jobs. The study said this was, generally, not a big issue because STEM skills are valued in many other occupations. However, it becomes an issue when STEM-educated immigrants in Canada end up  working at jobs that do not require a university education. In Canada, only 20 per cent of STEM educated immigrants working outside of the field are actually working a job that requires a university degree. In the U.S., it is 48 per cent.

Among all STEM-educated workers, immigrants earned 25 per cent less than their Canadian-born counterparts. There was no earnings gap between immigrants and U.S.-born workers.

Even within the Canadian STEM field, immigrants who found work earned 17 per cent less than Canadian-born individuals. In the U.S., immigrants earned about 4 per cent more than their native-born counterparts.

STEM-educated immigrants who did not find a job in the field earned about 34 per cent less than Canadians with the same education. The wage gap was narrower in the States, with immigrants earning about 7 per cent less.

Why are outcomes better in the U.S.?

Statistics Canada offers five possible explanations, though little research has been done on this question.

U.S. is first choice for many high-skilled immigrants

It may be that the skills of STEM-educated immigrants entering the U.S. are higher on overage than those entering Canada.

The study referenced a paper that examined the wage gap between immigrants and native-born workers in Australia, Canada and the U.S. It found significant earning gaps in Australia and Canada compared to the U.S. The authors said the tendency for highly-skilled immigrants to choose the U.S. over other countries was a primary factor in their better relative earnings outcomes in the U.S.

More STEM-educated immigrants in Canada

A higher percentage of Canada’s STEM-educated workforce are immigrants compared to the U.S. The number of STEM-educated immigrants who entered Canada rose significantly in the 1990s in response to the high-tech boom, and has remained at high levels since. Canada does not face a general shortage of STEM workers, the study says.

When there’s an abundance of workers, employers may tend to hire STEM graduates from universities that they are familiar with, and who have experience from countries with similar economies to Canada.

Different immigrant selection processes

In order to immigrate to the U.S. as a skilled worker, immigrants typically already have a job offer when they arrive, or they are international students who can be interviewed by prospective employers in the country. Immigrants who entered the U.S. contingent on job offers were more likely to get skilled jobs. Those who entered on a student, trainee, or temporary work visa, had a significant advantage over the native-born population in wages, patenting and publishing. Much of this advantage was due to their comparatively higher levels of education.

Canada’s points-based immigration system, which has been in use since the 1960s, selects economic immigrants based on their human capital. These days, the Express Entry system ranks candidates based on factors like education, work experience, age, and language ability. The highest-scoring candidates get invited to apply for permanent immigration. Though candidates can get extra points for having a job offer, in some cases, it is not required in order to immigrate to Canada.

Canadian employers play a larger role in immigrant selection in the Canadian Experience Class (CEC) federal immigration program, as well as many Provincial Nominee Programs (PNP), than compared to the Federal Skilled Worker Program.

The study found that STEM-educated immigrants that immigrate through the CEC do relatively well compared to others, and those who go through the PNP typically have the poorest outcomes. One major difference is that the CEC requires immigrants to have at least one year of skilled work experience in Canada, whereas the PNP is more varied, and includes pathways for low-skilled and medium-skilled workers to become permanent residents.

Differences in country of education

Country of education is one of the most important determinants of immigrant earnings, along with language and race or visible minority status, the study says.

Country of education may differ significantly among STEM-educated immigrants in Canada and the U.S. STEM immigrants educated in non-Western countries do not do as well, economically, as others. The study suggest this is for a number of reasons, for example, the quality of education may be lower, or perceived to be lower. In the absence of a shortage of STEM workers, employers may prefer to hire those educated in Western counties. Also, some credentials are not recognized by professional associations in the host country, either for valid or invalid reasons, and this may prevent immigrants from developing countries from getting STEM jobs. Language or cultural issues may also prevent immigrants from being able to use their STEM education. Discrimination may also be a factor.

Other factors unrelated to immigration policy

Factors unrelated to immigration policies may also contribute to better outcomes of STEM-educated immigrants in the U.S., for example, the U.S. industrial structure may result in a higher demand for STEM-educated workers in comparison to other countries.

Source: Outcomes of STEM immigrants in Canada and the U.S.

StatCan/IRCC Study: Selecting economic immigrants from among temporary foreign workers and labour market outcomes by admission programs

Another insightful data-based analysis by StatCan and IRCC, showing the importance of Canadian work experience from being former temporary foreign workers:

Canada selects economic immigrants through various programs, including the Federal Skilled Worker Program (FSWP), the Provincial Nominee Program (PNP) and the Canadian Experience Class (CEC).

Previous research has shown that the last two groups fare better in the labour market than the first one, at least in the initial years after immigration. The difference stems largely from the fact that proportionately more economic immigrants selected from the PNP and the CEC were former temporary foreign workers, according to the first study released today.

The study, titled ‘Two-step immigration selection: Why did immigrant labour market outcomes vary by admission programs?,’ shows that from 2009 to 2016, about two-thirds of immigrants selected from the PNP and essentially all immigrants selected from the CEC were former temporary foreign workers, i.e. had employment earnings in Canada before obtaining their permanent residence.

In contrast, about one-quarter of their counterparts selected from the FSWP were former temporary foreign workers.

Since having worked in Canada before obtaining one’s permanent residence is associated with higher employment incidences and earnings, the fact that a relatively high proportion of immigrants selected from the PNP and the CEC worked in Canada in the past explains to a large extent their better labour market outcomes.

For example, 93% of immigrants selected from the PNP and 95% of immigrants selected from the CEC found employment in the first full year after obtaining permanent residency. The corresponding percentage for their FSWP counterparts was substantially lower, at 80%.

The study shows that the greater propensity to have worked in Canada in the past accounts for about 40% of the 13-percentage-point difference observed between immigrants selected from the PNP and the FSWP. It also accounts for about two-thirds of the 15-percentage-point difference observed between immigrants selected from the CEC and the FSWP.

The relatively high proportion of PNP and CEC immigrants who had previous work experience in Canada also explains why these groups earn more than their FSWP counterparts. It accounts for at least 94% of the earnings differences observed between these groups, on the one hand, and immigrants selected from the FSWP, on the other hand, during the first year after immigration.

Likewise, the greater propensity to have worked in Canada in the past accounts to a large extent for the differences in employment incidences and earnings observed between the three groups, five years after immigration.

The second study, titled ‘Two-step immigration selection: Skilled work experience vs. pre-arranged jobs,’ focuses on the economic immigrants who were selected under Canada’s Express Entry system in 2015 and 2016. It compares the degree to which Canadian work experience before immigration and pre-arranged employment at the time of application predict the initial labour market outcomes of these economic immigrants.

Both Canadian work experience and pre-arranged employment are key criteria underlying Canada’s Express Entry system of economic immigration selection.

The study shows that Canadian work experience appears to be a better predictor of initial labour market outcomes than pre-arranged employment.

Economic immigrants who had pre-arranged employment displayed, in the first two years after immigration, employment incidences that were similar to those of other economic immigrants selected under the Express Entry system.

In contrast, economic immigrants who had worked in Canada before immigrating and who had received relatively high annual earnings while doing so (over $50,000 in 2017 dollars) had employment incidences that were 8 percentage points higher than those of other economic immigrants without Canadian work experience.

Canadian work experience was also a stronger predictor of initial earnings after immigration than pre-arranged employment.

Even after controlling for education, among other factors, immigrants with a pre-arranged job earned 15% more than those without a pre-arranged job in the first two years after immigration. However, immigrants who had received high earnings in Canada before immigrating earned almost twice as much as those who had no Canadian work experience.”

View or download the full reports:

Two-step Immigration Selection: Why Did Immigrant Labour Market Outcomes Vary by Admission Programs?

Two-step Immigration Selection: Skilled Work Experience vs. Pre-arranged Jobs

 

 

ICYMI: Montreal aims to break down barriers for immigrants in the workplace

Once again, contrast between Montreal and the regions:

Mayor Valérie Plante stood in front of 10 red doors inscribed with messages like: “Let’s open doors to employment for them,” “We hold all the keys” and “We can all play a role.”

The life-size doors on display at Complexe Desjardins aim to illustrate the barriers that still face immigrants in the job market and to urge employers to hire them.

“Sixty per cent of immigrants arriving in Quebec choose to settle in Montreal but unfortunately, even today, the doors to employment are still mostly shut rather than open for immigrants,” said Plante, as she launched a month-long public awareness campaign with Shahir Guindi, national co-chair of the Osler, Hoskin & Harcourt law firm and chair of the board of the Chamber of Commerce of Metropolitan Montreal.

While unemployment is at a historic low of five per cent, it is much higher among newcomers, despite the fact that 40 per cent of immigrants are university educated and 10 per cent hold graduate degrees, Plante said.

Montreal ranks fifth among the North American metropolitan regions that attract the most immigrants, according to Canadian and U.S. immigration numbers. However, it lags behind other Canadian cities in helping them integrate and find jobs.

The unemployment rate among newcomers to Montreal was 9.8 per cent in 2016, compared with 5.9 per cent for residents who were born in Canada, according to the Canadian Index for Measuring Integration (CIMI), coordinated by the Association for Canadian Studies (ACS).

More than 22 per cent of immigrants in Montreal live below the poverty line, compared with 12 per cent of Canadian-born citizens, it shows.

Overall, the city ranks 30th out of 35 among Canadian cities for immigrants’ economic performance compared to the rest of the population, according to CIMI.

Plante said she met with about 50 business leaders and officials with the provincial immigration department last year to chart a strategy to improve outcomes for newcomers.

The awareness campaign has support from 18 executives at the National Bank, Métro, Deloitte Canada, Mouvement Desjardins, as well as public or non-profit organizations like the Société de transport de Montréal (STM), Centraide and the Université du Québec à Montréal.

Its French-only website encourages employers to favour diversity in their workforces by making it a company value and requiring managers to implement inclusive policies. It also calls on average Montrealers in the workforce to become aware of their own prejudices and to reach out to immigrants in their work and social circles by sharing contacts and helping them with their CVs.

However, ACS president Jack Jedwab said that while the initiative was praiseworthy, it did not address the negative message the Quebec government has sent by reducing the number of immigrants to Montreal by 24 per cent in 2019 over the previous year.

“We should do what we need to do to encourage and help people to improve their skills, so that they are in line with the needs of the economy,” he said.

“But the bigger messaging from the government isn’t as positive,” Jedwab noted.

The Coalition Avenir Québec government’s rationale for slashing immigration despite the current labour shortage was that newcomers are not integrating sufficiently into Quebec society, he said.

“You are sending a message that suggests that there is a problem out there,” he said.

Greater Montreal received 28,900 immigrants in the first 10 months of 2019, the last period for which numbers are available, compared to 38,315 for the corresponding period in 2018, Jedwab said.

The city received a total of 43,795 newcomers in 2018 and 44,725 in 2017, he said.

In 2019, Vancouver surpassed Montreal for the first time as a destination for newcomers, with 34,095 immigrants from January to October 2019. It received 35,265 immigrants in 2018 and 29,830 immigrants in 2017.

Toronto received 102,965 immigrants in the first 10 months of 2019. The number of newcomers was 106,460 in 2018 and 86,580 in 2017.

“Toronto is reaping a lot of the benefits of immigration in terms of its economy,” Jedwab said, noting that immigration “is the single source of growth for our population.”

In Toronto, the unemployment rate among immigrants in 2016 was 7.5 per cent, compared with 7.7 per cent among the Canadian-born population. However, immigrants in Toronto had higher rates of poverty than the native-born population, with 19 per cent of newcomers living below the poverty line compared with 11 per cent of people born in Canada.

Source: Montreal aims to break down barriers for immigrants in the workplace

Switzerland: Immigrants who naturalize outearn their peers

Interesting study from Switzerland that likely reflects in part the particularities of the Swiss immigrant population and the citizenship acquisition process. Makes the case for more facilitative approaches to granting citizenship:

The moment when an immigrant becomes a citizen of his adopted country looks remarkably similar in ceremonies around the world: a hand raised, an oath taken, a flag waved, and a celebration with family and friends. But the road leading to that moment differs widely by country. Some are long and steep and others more walkable, depending on the country’s policies.

Behind this divergence is a kind of chicken-and-egg problem. Is citizenship a prize, something to be won only after considerable striving? Then it should be surrounded by hurdles, like requirements that you’ve mastered the language, lived in the country a long time, and achieved a certain level of economic success. Or is citizenship an invitation to build a future in the country, something that helps immigrants succeed? Then it should be easier to get.

Which side has the better of the argument? A new study from the Immigration Policy Lab at ETH Zurich and Stanford University (IPL) sheds light on the importance of citizenship in immigrants’ trajectories. Looking at more than thirty years of data on thousands of immigrants in Switzerland, IPL researchers found that those who had naturalized earned more money each year than those who hadn’t—and the boost in income was largest for people facing the greatest disadvantages in the labor market.

A Puzzle for Researchers

Considering the benefits usually reserved for citizens, it’s easy to imagine how naturalizing early on could equip immigrants to prosper: access to advantageous jobs, eligibility for scholarships to get education and training, and the assurance that they can stay in the country indefinitely and invest in the future.

But it’s hard to prove that citizenship actually delivers on this promise, because those who get citizenship and those who don’t aren’t similar enough to allow for meaningful comparison. People who jump the hurdles to apply for citizenship differ in many ways from those who hold back, and successful applicants differ from unsuccessful ones. If naturalized immigrants do better in the long run, this could be due to any number of factors—factors that, like work ethic or resources, also account for their ability to successfully navigate the citizenship application process.

“To accurately assess the benefits of citizenship it is essential to compare naturalized and non-naturalized immigrants that are similar in all characteristics but for their passport”, said Dalston Ward, a postdoctoral researcher at ETH Zurich.

This is where Switzerland is a boon to social scientists. Between 1970 and 2003, some Swiss towns put citizenship applications to a . To become a Swiss citizen, an immigrant would have to receive more “yes” than “no” votes. For applicants who won or lost by only a handful of votes, the decision may as well have been pure chance, enabling an apples-to apples comparison. Combine that with decades of records from the Swiss pension system showing annual earnings, and you have a trustworthy way to determine whether or not citizenship actually improves immigrants’ fortunes.

Long-Term Benefits

After identifying those who narrowly won or lost their bid for citizenship, the researchers looked back at the five years leading up to the vote that would divide them. There, they had similar incomes. But after the vote, the new citizens went on to earn more money than those who remained in permanent residency status, and the earnings gap increased as time went on. At first, they earned an average of about 3,000 Swiss francs more (roughly the same in U.S. dollars), and that increased to almost 8,000 a decade later. In any given year after the vote awarded them citizenship, these immigrants earned an average of 5,637 more than their peers.

“In sum, these findings provide causal evidence that citizenship is an important catalyst for economic integration, which benefits both immigrants and host communities”, said Jens Hainmueller, a professor of political science at Stanford University.

If citizenship was the wedge between the two groups, how exactly did it lift one above the other? The most likely explanation, the researchers thought, was that it counteracted the discrimination that colors immigrants’ lives in the job market. When immigrants apply for jobs in Switzerland, their citizenship status is almost as visible as hair color or height, and individual employers can use it to filter candidates. Immigrants who haven’t become citizens may be seen as less skilled or less likely to remain in the country. On the other hand, because it is relatively difficult to gain citizenship in Switzerland, it may act as a kind of credential.

A closer look at the data bears this out. Citizenship made the greatest difference for immigrants facing obstacles—those likely to be discriminated against for their religion or country of origin, or those in low-wage occupations. When the researchers focused on immigrants from Turkey and the former Yugoslavia, who were often refugees and potentially targets of anti-Muslim sentiment, they found an average yearly earnings gain of 10,721—roughly double that of the new citizens as a whole.

According to Dominik Hangartner, a professor of public policy at ETH Zurich, “the finding that the benefits are disproportionally larger for poorer and more marginalized immigrants speaks to the important role that citizenship policies can play in facilitating more equal access to employment opportunities for immigrants.”

While income is only one element of an immigrant’s life, the persistence of the earnings gap revealed in this study raises an important question about the public purpose of citizenship. We tend to think of citizenship as a private issue, personally meaningful to the but not necessarily something society or state should invest in.

But if citizenship can counter discrimination, boost social mobility, and act as a stepping stone toward deeper integration, then its benefits reach beyond immigrants themselves. That means that we all have a stake in the debate over whether to obstruct or ease access to . At a time when cities, states, and countries around the world are reconsidering their welcome to immigrants, it’s all the more important to have solid evidence about the contributions newcomers can make—and the policies that best encourage them.

Source: Immigrants who naturalize outearn their peers

A Perfect Scorecard: Canada’s immigrants are faring much better in the labour market

Nice data analysis and overall good news:

Immigrant underemployment has been a longstanding challenge in Canada, but recent evidence runs in contrast to the negativity that often surrounds this subject. 

While it is true that many immigrants are working below their paygrade, which according to a recent report by the Royal Bank of Canada costs the economy an estimated $50 billion in annual GDP, Statistic Canada data shows considerable progress is being made on this front.

A Perfect Scorecard

When assessing various immigrant labour force metrics, everything that we want to be happening is actually occurring: More immigrants are in the labour market and are employed, fewer of them are underemployed, and their wages are on the rise.

Among core-aged workers (those between the ages of 25-54), the participation rate of Canada’s newcomers (those in Canada for five years or less) stood at 78 per cent in 2018 compared with 74 per cent in 2006.

This is a positive finding because it suggests that newcomers today are integrating into the labour market more quickly than their predecessors (the participation rate represents the percentage of people within a specific cohort that are working or are looking for a job).

The newcomer employment rate (the share of a worker cohort with a job) has also improved — it was 71.3 per cent in 2018 compared with 65.2 per cent in 2006.

Similarly, immigrants who have been in Canada between 5 and 10 years have seen their employment rates rise significantly to 79.5 per cent in 2018 compared with 75.6 per cent in 2006.

The unemployment rate (the share of a worker cohort looking for a job) has declined. Among newcomers, it stood at 8.6 per cent in 2018, which may seem high, but is a marked improvement compared with what it stood at after the 2008-09 recession (14.7 per cent) and back in 2006 (11.5 per cent). It has also dropped among other immigrant cohorts—it stood at just 5.3 per cent in 2018 for immigrants that have been in Canada between 5 and 10 years compared with 7.3 per cent in 2006.

Immigrant wages are also rising. A 2018 Statistics Canada report noted that “immigrants admitted to Canada in 2015 earned the highest entry wages of any cohort admitted since 1981.”

Moreover, core-aged immigrants with a university degree saw their wages increase by 3.5 per cent in 2017 compared with the previous year (the Canadian-born cohort saw a 0.9 per cent increase).

Two Factors at Play

The first major factor that can explain the better performance of immigrants is Canada’s tightening labour market.

With more baby boomers retiring, Canadian employers are increasingly counting on immigrants to fill the void. According to a Conference Board of Canada study, all 9.2 million baby boomers will retire over the next decade, which means that employers will need to become even more reliant on immigrants.

Reforms to Canada’s immigration policy are the second factor. These include reforms to selection policies as well as expanded efforts to support newcomer settlement and integration.

Expression of interest systems launched by the federal government (Express Entry) and provinces across Canada are likely contributing to improved immigrant outcomes. By ranking applicants against one another based on human capital factors such as age, work experience, education, and language ability, the federal government and provinces are now giving preference to the highest-scoring immigrants.

This marks a departure from Canada’s previous system where immigrants were selected so long as they met a certain points threshold, even if there were other candidates waiting behind them who had higher scores.

Canada’s Provincial Nominee Program (PNP) is also likely contributing to the improvements. An evaluation by Immigration, Refugee, and Citizenship Canada (IRCC) noted that the vast majority of PNP arrivals become established economically, with high employment rates, and earnings that increase over time.

More temporary residents are now transitioning to permanent residents under Express Entry and the PNP (“two-step migration”). This is sound policy as Statistics Canada research has shown that immigrants who previously worked or studied in Canada initially have a large earnings advantage over those without prior experience living in Canada.

Settlement Services

The federal government and provinces and territories fund settlement supports for immigrants such as language training, employment services, among others. IRCC is the largest funder of such services and has increased its annual settlement budget fivefold over the past two decades to $1.5 billion today.

It is likely that this increased investment is contributing to the labour market improvements immigrants have recently enjoyed.

Room for improvement and reasons to be optimistic

As noted by a recent CIC News article, immigrants continue to face labour market barriers that undermine their ability to make even more significant contributions to Canada’s economy.

At the same time, they are doing better in the labour market, which is probably due to baby boomer retirements and refinements to immigration policy.

These two factors will continue, which should leave us feeling optimistic that immigrants will continue to enjoy stronger labour market outcomes.

Source: A Perfect Scorecard: Canada’s immigrants are faring much better in the labour market