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Entry Earnings of Canada’s Immigrants over the Past Quarter Century: the Roles of Changing Characteristics and Returns to Skills

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  • Hou, Feng
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    Abstract

    We examine whether the factors associated with the rise in the Canadian born - immigrant entry earnings gap played different roles in the 1980s, the 1990s, and the early 2000s. We find that for recent immigrant men, shifts in population characteristics had the most important effect in the 1980s when their earnings gap expanded the most, but this “compositional†effect diminished in the 1990s and early 2000s. The effect of changes in returns to Canadian experience and education was small for men, but stronger for women in all three periods. During the early 2000s the IT bust, combined with a heavy concentration of immigrants in IT-related occupations, was the primary explanation of the increase in their earnings gap. Furthermore, returns to foreign experience declined in the 1980s and 1990s, but recovered moderately in the early 2000s. In contrast, the relative return to immigrant education declined in the early 2000s.

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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2063%20-%20Hou.pdf
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    Bibliographic Info

    Paper provided by UBC Department of Economics in its series CLSRN Working Papers with number clsrn_admin-2010-23.

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    Length: 34 pages
    Date of creation: 22 Jun 2010
    Date of revision: 22 Jun 2010
    Handle: RePEc:ubc:clssrn:clsrn_admin-2010-23

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    Keywords: Immigrants; Entry Earnings; Decomposition; Canada;

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    1. Boudarbat, Brahim & Lemieux, Thomas & Riddell, W. Craig, 2010. "The Evolution of the Returns to Human Capital in Canada, 1980-2005," IZA Discussion Papers 4809, Institute for the Study of Labor (IZA).
    2. Darren Lubotsky, 2000. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Working Papers 824, Princeton University, Department of Economics, Industrial Relations Section..
    3. Paul Beaudry & David A. Green, 2000. "Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 907-936, November.
    4. Frenette, Marc Morissette, Rene, 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.
    5. Joseph Schaafsma & Arthur Sweetman, 2001. "Immigrant earnings: age at immigration matters," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1066-1099, November.
    6. Abdurrahman Aydemir & Chris Robinson, 2008. "Global labour markets, return, and onward migration," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1285-1311, November.
    7. Bloom, D. & Grenier, G. & Gunderson, M., 1993. "The Changing Labour Market Position of Canadian Immigrants," Working Papers 9305e, University of Ottawa, Department of Economics.
    8. 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.
    9. Aydemir, Abdurrahman Skuterud, Mikal, 2004. "Explaining the Deteriorating Entry Earnings of Canada's Immigrant Cohorts: 1966-2000," Analytical Studies Branch Research Paper Series 2004225e, Statistics Canada, Analytical Studies Branch.
    10. 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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