In The Know

Gap between immigrant earnings and their Canadian-born counterparts is increasing: StatsCan

It should be no surprise that with a worldwide pandemic forcing nations to tightly manage their borders for the sake of their citizens’ health, immigration rates have plummeted over the past year. In the first half of 2020 member countries of the OECD gave out half as many permanent resident permits as the year before.

Canada, though, is determined to defy this trend at rates that far surpass even other high-immigration countries. The Liberal government announced in October a plan to admit 1.2 million immigrants in the next three years, an equivalent of three percent of Canada’s current population. 

But how do immigrants fare once they do get here? Are the gaps in labour market outcomes between immigrants and their Canadian-born counterparts starting to close? Eden Crossman, Feng Hou and Garnett Picot explore this question in a new report for Statistics Canada. 

The paper compares the employment rate and the weekly earnings of immigrant and Canadian-born workers throughout the 2000s and 2010s, and is based on information from the censuses from 2001 to 2016 and the Labour Force Survey from 2015 to 2019. 

The data shows that over the 2000-to-2019 period, the employment rate for new and recent immigrant men grew faster than for Canadian-born men. The relative employment position of new immigrant women also improved slightly.

From 2001 to 2019, the gaps in the employment rate among new and recent immigrant men were considerably reduced relative to Canadian-born men because the employment rate increased substantially among new and recent immigrant men. This may also be related to the increased tendency to select economic immigrants from the pool of temporary foreign workers, which has been shown to improve entry and longer-term earnings.

Overall, the paper finds that “entry earnings have been improving, particularly among economic immigrants, since around 2005. However, the earnings of their Canadian-born counterparts, which serve as a benchmark indicator of the average earnings growth being generated by the economy, have also been increasing, and, in some cases, at a faster rate. The result has been a stable or increasing gap in immigrant earnings.”

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