The Economic Performance of Immigrants with Canadian Education

According to the literature on the economic situation of immigrants, non-recognition of human capital acquired outside of the host country is one of the greatest challenges that immigrants have to overcome when they arrive in Canada. This article exploits data from a Canadian survey conducted in 2005 involving postsecondary graduates from the Class of 2000 in order to determine whether obtaining a Canadian diploma or degree helps eliminate wage gaps between immigrants and native-born Canadians. The advantage of using these data is that they allow for a comparison of groups who were educated under the same education system and entered the labour market at the same time. Essentially, our results show that age at immigration is an important determinant of labour market integration even after obtaining a Canadian diploma or degree. Those who immigrated at a very young age obtained comparable -- and even, in the case of men, higher -- wages than Canadian-born graduates. For immigrants who arrived as adults (i.e., at age 18 or older), the results reveal, all things being equal, a negative wage gap of 17% for men and 5.2% for women, relative to Canadian-born men and women. Econometric analyses also confirm the important impact of source region on the wages of immigrants who arrived as adults. Immigrants coming from Asia, the principal source of immigration to Canada, have a substantial wage disadvantage, in the case of both men and women. To conclude, the fact of returning to school after immigration and obtaining a Canadian diploma or degree does not guarantee that wage gaps with native-born Canadians will be eliminated; however, immigrant women do relatively better than immigrant men.