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An Analysis of the Earnings of Canadian Immigrants

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Author Info
David E. Bloom
Morley Gunderson

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Abstract

This paper reports estimates of simple wage equations fit to cross-sectional and pseudo-longitudinal data for Canadian immigrants in the 1971 and 1981 Canadian censuses. The estimates are used to assess (1) the usefulness of crosssectional analyses for measuring the pace of immigrant earnings growth, (2) the labor market implications of admissions policies that place different weights on the work skills possessed by prospective entrants, and (3) the relative impact of selective outmigration and job-matching on the shape of immigrant earnings distributions as duration of stay increases. The estimates provide evidence of a small to moderate assimilation effect that suggests that immigrants make up for relatively low entry wages, although the wage catch-up is not complete until 13 to 22 years after entry into Canada. These results are revealed clearly in both the pseudo-longitudinal and the cross-sectional analyses. The estimates also provide evidence that the unobserved quality of immigrants' labor market skills declined following changes in Canada's immigration policies in 1974 that led to a sharp increase in the proportion of immigrants admitted on the basis of family ties. Finally, since there is no evidence that the variance of immigrant earnings increases with their duration of stay in Canada, and since there are no differential immigrant-native changes in higher-order moments of the earnings distribution as duration of stay increases, the results are inconclusive with respect to the importance of selective outmigration and job matching in the evolution of immigrant earnings distributions over time.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3035.

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Date of creation: Jul 1989
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Handle: RePEc:nbr:nberwo:3035

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Katz, Eliakim & Stark, Oded, 1984. "Migration and Asymmetric Information: Comment," American Economic Review, American Economic Association, vol. 74(3), pages 533-34, June. [Downloadable!] (restricted)
  2. Long, James E, 1980. "The Effect of Americanization on Earnings: Some Evidence for Women," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 620-29, June. [Downloadable!] (restricted)
  3. Jasso, Guillermina & Rosenzweig, Mark R, 1990. "Self-Selection and the Earnings of Immigrants: Comment," American Economic Review, American Economic Association, vol. 80(1), pages 298-304, March.
  4. Harris, Milton & Holstrom, Bengt, 1982. "A Theory of Wage Dynamics," Review of Economic Studies, Blackwell Publishing, vol. 49(3), pages 315-33, July. [Downloadable!] (restricted)
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  5. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October. [Downloadable!] (restricted)
  6. George J. Borjas, 1982. "The earnings of male hispanic immigrants in the United States," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 35(3), pages 343-353, April.
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  1. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 378-396, December. [Downloadable!] (restricted)
  2. Picot, Garnett & Sweetman, Arthur, 2005. "The Deteriorating Economic Welfare of Immigrants and Possible Causes: Update 2005," Analytical Studies Branch Research Paper Series 2005262e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  3. Picot, Garnett & Hou, Feng & Coulombe, Simon, 2007. "Chronic Low Income and Low-income Dynamics Among Recent Immigrants," Analytical Studies Branch Research Paper Series 2007294e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  4. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA). [Downloadable!]
  5. David E. Bloom & Gilles Grenier & Morley Gunderson, 1994. "The Changing Labor Market Position of Canadian Immigrants," NBER Working Papers 4672, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Christopher D. Carroll & Byung-Kun Rhee & Changyong Rhee, 1998. "Does Cultural Origin Affect Saving Behavior? Evidence from Immigrants," NBER Working Papers 6568, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Myles, John & Picot, Garnett, 2005. "Income Inequality and Low Income in Canada: an International Perspective," Analytical Studies Branch Research Paper Series 2005240e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  8. Hou, Feng & Picot, Garnett, 2003. "The Rise in Low-income Rates Among Immigrants in Canada," Analytical Studies Branch Research Paper Series 2003198e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  9. Peter S. Li, 2001. "The Market Worth of Immigrants' Educational Credentials," Canadian Public Policy, University of Toronto Press, vol. 27(1), pages 23-38, March. [Downloadable!] (restricted)
  10. Peter S. Li, 2003. "Initial Earnings and Catch-Up Capacity of Immigrants," Canadian Public Policy, University of Toronto Press, vol. 29(3), pages 319-337, September. [Downloadable!] (restricted)
  11. Picot, Garnett & Hou, Feng & Coulombe, Simon, 2007. "Le faible revenu chronique et la dynamique du faible revenu chez les nouveaux immigrants," Direction des études analytiques : documents de recherche 2007294f, Statistics Canada, Direction des études analytiques. [Downloadable!]
  12. Regets, Mark C. & Duleep, Harriet Orcutt, 2002. "The Elusive Concept of Immigrant Quality: Evidence from 1970-1990," IZA Discussion Papers 631, Institute for the Study of Labor (IZA). [Downloadable!]
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