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The Rise in Low-income Rates Among Immigrants in Canada

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  • Hou, Feng
  • Picot, Garnett
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    Abstract

    This study uses census data to focus on low-income among immigrants, and asks a number of questions: (1) have low-income rates increased among successive cohorts of entering immigrants, both in absolute terms and relative to the Canadian born (they have), (2) is this increase due to changes in their characteristics (e.g. education, age, source country, language etc.), (3) do low-income rates fall as new immigrants acquire Canadian experience, and are there signs that low-income rates fall faster among the more recent entering cohorts with the higher entry level rates, resulting in some "catch-up", and (4) in the major Canadian cities, to what extent was the deterioration in the city level low-income rates during the 1990s concentrated among immigrants? The analysis covers the period from 1980 to 2000, and focuses on change between 1980 to 1990, and 1990 to 2000, years that are roughly at business cycle peaks. The study finds that low-income rates among "recent" immigrants (in Canada for less than five years) almost doubled between 1980 and 1995, and then fell during the strong recovery of the late 1990s. However, when focusing on outcomes at business cycle peaks (1980, 1990 and 2000) to establish comparable long-term, low-income rates rose continuously for each successive cohort of immigrants. Furthermore, the gap at entry in their low-income rate relative to the Canadian-born also rose over the 1980-2000 period. The changing composition of "recent" immigrants with respect to language, source country, family type and age accounted for, at most, half of the rise in the low-income rate among this group, and likely substantially less than that. Most of the increase was a result of the widespread rise in low-income among recent immigrants in all age groups, family types, language groups, education groups, and most of the more significant (numerically) source regions, notably Africa and the Asian source regions. The peak to peak rise in the low-income rate between 1980 and 2000 was not restricted to recent immigrants, and was observed (to a lesser extent) among immigrants who had been in Canada for up to 20 years. Low-income rates among immigrants tend to fall with time spent in Canada. Furthermore, among the more recent entering cohorts with the higher low-income rates at entry, the rate of decline is faster. There is evidence of a "catch-up" (to earlier cohorts) among the more recent entering cohorts. However, low-income rates remain higher among immigrant cohorts of the late 1980s and early 1990s than among their counterparts in the 1970s (comparing groups with a comparable number of years in Canada). The rise in the low-income rates in the three major Canadian cities, and in Ontario and B.C. during the 1990s in particular, was largely concentrated among the immigrant population. Basically, low-income rates have been falling over the past two decades among the Canadian born, and rising among immigrants. A discussion of

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    Bibliographic Info

    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2003198e.

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    Date of creation: 19 Jun 2003
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    Handle: RePEc:stc:stcp3e:2003198e

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    Web page: http://www.statcan.gc.ca
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    Keywords: Employment and unemployment; Ethnic diversity and immigration; Household; family and personal income; Immigrants and non-permanent residents; Income; pensions; spending and wealth; Integration of newcomers; Labour; Labour market and income; Low income and inequality; Wages; salaries and other earnings;

    References

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    1. Baker, Michael & Benjamin, Dwayne, 1997. "The Role of the Family in Immigrants' Labor-Market Activity: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, American Economic Association, vol. 87(4), pages 705-27, September.
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    3. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 12(3), pages 369-405, July.
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    7. Garnett Picot & Andrew Heisz, 2000. "The Performance of the 1990s Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 7-25, July.
    8. David E. Bloom & Gilles Grenier & Morley Gunderson, 1995. "The Changing Labour Market Position of Canadian Immigrants," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 987-1005, November.
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    21. Sweetman, Arthur, 2004. "Immigrant Source Country Educational Quality and Canadian Labour Market Outcomes," Analytical Studies Branch Research Paper Series 2004234e, Statistics Canada, Analytical Studies Branch.
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    23. Mary L. Grant, 1999. "Evidence of New Immigrant Assimilation in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 930-955, August.
    24. George J. Borjas, 1993. "Immigration Policy, National Origin, and Immigrant Skills: A Comparison of Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 21-44 National Bureau of Economic Research, Inc.
    25. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 3(4), pages 463-89, October.
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    Citations

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    Cited by:
    1. Picot, Garnett & Myles, John, 2005. "Income Inequality and Low Income in Canada: an International Perspective," Analytical Studies Branch Research Paper Series 2005240e, Statistics Canada, Analytical Studies Branch.
    2. Chen, Wen-Hao & Aydemir, Abdurrahman & Corak, Miles, 2008. "Intergenerational Education Mobility Among the Children of Canadian Immigrants," Analytical Studies Branch Research Paper Series 2008316e, Statistics Canada, Analytical Studies Branch.
    3. Picot, Garnett & Morissette, Rene, 2005. "Low-paid Work and Economically Vulnerable Families over the Last Two Decades," Analytical Studies Branch Research Paper Series 2005248e, Statistics Canada, Analytical Studies Branch.
    4. Picot, Garnett & Green, David A. & Frenette, Marc, 2004. "Rising Income Inequality in the 1990s: An Exploration of Three Data Sources," Analytical Studies Branch Research Paper Series 2004219e, Statistics Canada, Analytical Studies Branch.
    5. Hou, Feng & Picot, Garnett & 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.
    6. Daniel Lai & Wendy Leonenko, 2007. "Effects of Caregiving on Employment and Economic Costs of Chinese Family Caregivers in Canada," Journal of Family and Economic Issues, Springer, Springer, vol. 28(3), pages 411-427, September.
    7. repec:ebl:ecbull:v:9:y:2006:i:2:p:1-7 is not listed on IDEAS
    8. Grady, Patrick, 2008. "Is Canadian Immigration too high? A Labour Market and Productivity Perspective," MPRA Paper 25221, University Library of Munich, Germany.
    9. Morissette, Rene & Frenette, Marc, 2003. "Will They Ever Converge? Earnings of Immigrants and Canadian-born Workers over the Last Two Decades," Analytical Studies Branch Research Paper Series 2003215e, Statistics Canada, Analytical Studies Branch.
    10. Nong Zhu & Cecile Batisse, 2014. "L’inégalité, la pauvreté et l'intégration économique des immigrants au Canada depuis les années 1990," CIRANO Working Papers, CIRANO 2014s-10, CIRANO.
    11. Hou, Feng & Picot, Garnett, 2009. "The Effect of Immigrant Selection and the IT Bust on the Entry Earnings of Immigrants," CLSSRN working papers, Vancouver School of Economics clsrn_admin-2009-37, Vancouver School of Economics, revised 26 Jun 2009.
    12. 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.
    13. Schellenberg, Grant, 2004. "The Retirement Plans and Expectations of Non-retired Canadians Aged 45 to 59," Analytical Studies Branch Research Paper Series 2004223e, Statistics Canada, Analytical Studies Branch.
    14. Picot, Garnett & Morissette, Rene, 2005. "Summary Of: Low-paid Work and Economically Vulnerable Families over the Last Two Decades," Analytical Studies Branch Research Paper Series 2005249e, Statistics Canada, Analytical Studies Branch.
    15. Wang, Lu & Hu, Wei, 2013. "Immigrant health, place effect and regional disparities in Canada," Social Science & Medicine, Elsevier, Elsevier, vol. 98(C), pages 8-17.

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