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Immigrant Employment Success in Canada, Part II: Understanding the Decline

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Journal of International Migration and Integration / Revue de l'integration et de la migration internationale Aims and scope Submit manuscript

Abstract

Research on the trend toward declining employment success for successive cohorts of immigrants to Canada—despite increases in their levels of education—has identified a number of statistical regularities as having potential explanatory relevance. Particularly for the period since 1980, the statistical regularities appear to be related only partly to changes in the individual characteristics of immigrants; they point also to the significance of contextual factors and changing processes within labour markets. This review illustrates how the search for explanations should probe the impact of broader labour market changes, and a wider range of determinants of immigrants employment success, reviewed in the companion article, Part I: Individual and Contextual Causes.

Résumé

La recherche sur le déclin de la réussite à l’emploi de cohortes successives d’immigrants au Canada malgré l’augmentation de leur niveau de scolarité, a identifié certains phénomènes statistiques réguliers qui pourraient fournir des explications. Les phénomènes statistique réguliers, surtout pour la période depuis 1980, ne semblent êtres lies que partiellement aux changements dans les caractéristiques individuelles des immigrants. Les facteurs contextuels et l’évolution des processus au sein des marchés du travail semblent jouer un rôle significatif pour la même période. Cet examen démontre l’importance de chercher des explications dans l’impact de changements plus globaux du marché du travail et dans un plus vaste éventail de facteurs déterminants dans la réussite à l’emploi des immigrants, tel qu’étudié dans l’article complémentaire (première partie, Individual and Contextual Causes.

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Notes

  1. The earnings analysis by Reitz (2001) shows results similar to those of Frenette and Morissette for the corresponding time period. Immigrant men arriving in the five-year period before the 1981 census earned 79.6% of the earnings of native-born men; by 1996, the figure had dropped to 60.0%. For women, it dropped from 73.1% to 62.4%.

  2. They describe this as “the answer to the following question. Given the actual observable characteristics of all workers—both immigrant and Canadian-born workers—by how much would, on average, predicted earnings of all workers differ under the two following scenarios: 1) all workers are paid according to the OLS earnings equation of immigrant cohort, and, 2) all workers are paid according to the OLS earnings equation of Canadian-born workers” (p. 9).

  3. Their earnings equation does not include interaction terms for education or experience with immigrant status, as does that of Frenette and Morissette.

  4. Net entry-level earnings fell 51% between the late 1960s cohort and the late 1990s cohort, the same figure for both men and women. For both men and women, the figure for the late 1990s represents a significant recovery from the early 1990s, by 10% for men and 12% for women.

  5. Statistical decomposition assumes that labour market competition occurs in a single national pool. However, immigrants compete in local labour markets, and as was pointed out above, the relative educational levels of immigrants in the specific labour markets are very different. The trends over time may be different as well. The extent of the impact changes in native-born educational levels on immigrants may vary, depending on the nature of the inter-group competition.

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Acknowledgments

This article was prepared with the financial support of Human Resources and Social Development Canada, Ottawa. Editorial assistance was provided by Elizabeth Thompson.

Author information

Authors and Affiliations

  1. Munk Centre for International Studies, University of Toronto, Room 358S, 1 Devonshire Place, Toronto, ON, M5S 3K7, Canada

    Jeffrey G. Reitz

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  1. Jeffrey G. Reitz
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Correspondence to Jeffrey G. Reitz.

Studies of Employment Trends and Policy Reviews in Chronological Order

Studies of Employment Trends and Policy Reviews in Chronological Order

Research Studies

  • Borjas, G. (1990). American competitiveness in the immigration market. In G. Borjas (Ed.), Friends or strangers: The impact of immigration on the US economy (pp. 199-217). New York: Basic Books.

  • Bloom, D.E., & Gunderson, M. (1991). An analysis of the earnings of Canadian immigrants. In J.M. Abowd & R.B. Freeman (Eds.), Immigration, trade and the labor market (pp. 321-42). Chicago, IL: University of Chicago Press.

  • Baker, M., & Benjamin, D. (1994). The performance of immigrants in the Canadian labour market. Journal of Labor Economics, 12, 369-405.

  • Bloom, D., Grenier, G., & Gunderson, M. (1995). The changing labour market position of Canadian immigrants. Canadian Journal of Economics, 28(4b), 987-1005.

  • McDonald, J.T., & Worswick, C. (1998). The earnings of immigrant men in Canada: Job tenure, cohort, and macroeconomic conditions. Industrial and Labor Relations Review, 51, 465-482.

  • Grant, M.L. (1999). Evidence of new immigrant assimilation in Canada. Canadian Journal of Economics, 32(4), 930-955.

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Reviews and Policy Discussions

  • Reitz, J.G. (1998). Measuring down: The economic performance of new Canadians is declining; If we want to change that, we need to rethink immigration policy. In C. Davies (Ed.), Post 2000: Business wisdom for the next century (pp. 157-163). Toronto, ON: Key Porter Books.

  • Grant, H.M., & Oertel, R.R. (1998). Diminishing returns to immigration? Interpreting the economic experience of Canadian immigrants. Canadian Ethnic Studies, 30, 56-76.

  • Couton, P. (2002). Highly skilled immigrants: Recent trends and issues. ISUMA: Policy Research, 3(2), 114-123.

  • Preston, V., Lo, L., & Wang, S. (2003). Immigrants’ economic status in Toronto: stories of triumph and disappointment. In P. Anisef & M. Lanphier (Eds.), The world in a city (pp. 192-262). Toronto, ON: University of Toronto Press.

  • Reitz, J.G. (2003). Immigration and Canadian nation-building in the transition to the knowledge economy. In W.A. Cornelius, P.L. Martin, J.F. Hollifield, & T. Tsuda (Eds.), Controlling immigration: A global perspective (2nd ed., pp. 97-133). Stanford, CA: Stanford University Press.

  • Ruddick, E. (2003). Immigrant economic performance: A new paradigm in a changing labour market. Canadian Issues/Thèmes canadiens, April. Montreal: Association for Canadian Studies.

  • Worswick, C. (2004). Immigrants’ declining earnings: Reasons and remedies. C.D. Howe Backgrounder Series 81. Toronto, ON: C.D. Howe Institute.

  • Picot, G. (2004). The deteriorating economic welfare of Canadian immigrants. Canadian Journal of Urban Research, 13(1), 25-45.

  • Picot, G., & Sweetman, A. (2005). The deteriorating economic welfare of immigrants and possible causes: Update 2005. Analytical Studies Branch Research Paper Series, Catalogue No. 11F0019MIE—No. 262). Ottawa: Statistics Canada, Business and Labour Market Analysis Division.

  • Reitz, J.G. (2005). Tapping immigrants’ skills: New directions for Canadian immigration policy in the knowledge economy. IRPP Choices, 11(1), 2-18.

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Reitz, J.G. Immigrant Employment Success in Canada, Part II: Understanding the Decline. Int. Migration & Integration 8, 37–62 (2007). https://doi.org/10.1007/s12134-007-0002-3

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