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Seeking Success in Canada and the United States: the Determinants of Labour Market Outcomes Among the Children of Immigrants

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  • Hou, Feng
  • Picot, Garnett
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    Abstract

    This paper reviews the recent research on labour market outcomes of the children of immigrants in Canada and the United States (i.e., the 2nd generation), and its determinants. The paper focuses on outcome gaps between the 2nd and third-and-higher generations, as well as the intergenerational transmission of earnings between immigrants (the first generation) and their children. Overall, in both Canada and the United States the labour market outcomes of the children of immigrants are positive. On average they have higher levels of education, and similar labour force participation rates and unemployment rates (no controls) as the third and higher generations (i.e. the children with native born parents). Furthermore, the children of immigrants tend to have higher earnings (unadjusted data). The 2nd generation is also more likely to be employed in professional occupations than the 3rd-and-higher generation, reflecting their higher average levels of education, particularly in Canada. However, after accounting for background characteristics, among racial minority groups in Canada the positive earnings gap turns negative. Regarding the determinants of aggregate outcomes, educational attainment may account for up to half of the (positive) earnings gap between the 2nd and third-and-higher generations. Other important determinants of the wage gap include location of residence and community size, ethnic group/source region background, the “degree of stickiness†in educational and earnings transmission between the 1st and 2nd generation, and “ethnic capitalâ€. In both Canada and the United States there are large differences in outcomes by source region/ethnic group background. The U.S the sociological literature in particular focuses on possible “downward assimilation†among children of immigrants with Mexican and other Hispanic backgrounds. In Canada, after controls, the 2nd generation racial minority groups outperform the 3rd plus generation educationally, but the 2nd generation with European and American backgrounds do better in the labour market. Based on the trends in the composition of immigrants since the 1980s, and their correlation with 2nd generation outcomes, the educational and labour market gaps may move in different direction in the two countries in the future; becoming increasingly positive in Canada, and more negative in the U.S.

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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2048%20-%20Picot%20and%20Hou.pdf
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    Bibliographic Info

    Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2009-63.

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    Length: 40 pages
    Date of creation: 28 Nov 2009
    Date of revision: 28 Nov 2009
    Handle: RePEc:ubc:clssrn:clsrn_admin-2009-63

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    Web page: http://www.clsrn.econ.ubc.ca/

    Related research

    Keywords: Immigrants; Second Generation; Labour Market Outcomes; Canada and the United States;

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    1. James P. Smith, 2003. "Assimilation across the Latino Generations," American Economic Review, American Economic Association, vol. 93(2), pages 315-319, May.
    2. Hou, Feng & Ram, Bali & Abada, Teresa, 2008. "Group Differences in Educational Attainment Among the Children of Immigrants," Analytical Studies Branch Research Paper Series 2008308e, Statistics Canada, Analytical Studies Branch.
    3. Picot, Garnett, 2008. "Immigrant Economic and Social Outcomes in Canada: Research and Data Development at Statistics Canada," Analytical Studies Branch Research Paper Series 2008319e, Statistics Canada, Analytical Studies Branch.
    4. Chiswick, Barry R. & DebBurman, Noyna, 2003. "Educational Attainment: Analysis by Immigrant Generation," IZA Discussion Papers 731, Institute for the Study of Labor (IZA).
    5. George J. Borjas, 1994. "Ethnicity, Neighborhoods, and Human Capital Externalities," NBER Working Papers 4912, National Bureau of Economic Research, Inc.
    6. Chen, Wen-Hao & Aydemir, Abdurrahman & Corak, Miles, 2005. "Intergenerational Earnings Mobility Among the Children of Canadian Immigrants," Analytical Studies Branch Research Paper Series 2005267e, Statistics Canada, Analytical Studies Branch.
    7. Frenette, Marc, 2005. "Is Post-secondary Access More Equitable in Canada or the United States?," Analytical Studies Branch Research Paper Series 2005244e, Statistics Canada, Analytical Studies Branch.
    8. Barry R. Chiswick & Yew Liang Lee & Paul W. Miller, 2005. "Immigrant Earnings: A Longitudinal Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 485-503, December.
    9. Borjas, George J, 1992. "Ethnic Capital and Intergenerational Mobility," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 123-50, February.
    10. 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.
    11. George J. Borjas, 2000. "Issues in the Economics of Immigration," NBER Books, National Bureau of Economic Research, Inc, number borj00-1.
    12. Aneta Bonikowska & Feng Hou & Garnett Picot, 2011. "A Canada-US Comparison of Labour Market Outcomes among Highly Educated Immigrants," Canadian Public Policy, University of Toronto Press, vol. 37(1), pages 25-48, March.
    13. David Card, 2004. "Is the New Immigration Really So Bad?," CReAM Discussion Paper Series 0402, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    14. Hou, Feng & Bonikowska, Aneta, 2011. "Reversal of Fortunes or Continued Success? Cohort Differences in Education and Earnings of Childhood Immigrants," Analytical Studies Branch Research Paper Series 2011330e, Statistics Canada, Analytical Studies Branch.
    15. Pendakur, Krishna & Woodcock, Simon D., 2009. "Glass Ceilings or Glass Doors? Wage Disparity Within and Between Firms," IZA Discussion Papers 4626, Institute for the Study of Labor (IZA).
    16. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
    17. George J. Borjas, 2000. "Introduction to "Issues in the Economics of Immigration"," NBER Chapters, in: Issues in the Economics of Immigration, pages 1-14 National Bureau of Economic Research, Inc.
    18. Morton Stelcner, 2000. "Earnings Differentials among Ethnic Groups in Canada: A Review of the Research," Review of Social Economy, Taylor & Francis Journals, vol. 58(3), pages 295-317.
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