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Are the educational credentials of immigrant and native-born workers perfect substitutes in Canadian labour markets? A production function analysis

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  • Ather H. Akbari
  • Yigit Aydede

Abstract

For the past two decades, most immigrants who arrived in the advanced nations of the western world originated in less advanced countries of the third world. One of the main barriers to their economic integration, as viewed in the public circles of host nations, is the lack of recognition of their educational credentials based on which the suitability of using education as a signal of labour market success of immigrants can be questioned. Canada is a major immigrant-receiving country whose reliance on immigration to meet shortages of skilled labour has increased, especially in its smaller provinces and rural areas. Using a production function approach, this study explores the degree of substitutability of educational credentials of immigrant and native-born labour. It analyses customized data, based on 2001 Canadian census, for 256 census divisions. While immigrant workers in all educational groups are imperfect substitutes for native-born, those with a university degree are the weakest substitutes. However, the value of elasticity of substitution between immigrant and native-born workers is high in all cases, indicating that immigrants are easy to absorb in Canadian labour force regardless of their educational attainment.

Suggested Citation

  • Ather H. Akbari & Yigit Aydede, 2013. "Are the educational credentials of immigrant and native-born workers perfect substitutes in Canadian labour markets? A production function analysis," Education Economics, Taylor & Francis Journals, vol. 21(5), pages 485-502, December.
    • Handle: RePEc:taf:edecon:v:21:y:2013:i:5:p:485-502
    DOI: 10.1080/09645292.2011.568700
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    References listed on IDEAS

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    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    2. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    3. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    4. Hendrik Van den Berg & Örn B. Bodvarsson, 2009. "The Economics of Immigration," Springer Books, Springer, number 978-3-540-77796-0, November.
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    Cited by:

    1. Krishna Pendakur & Ravi Pendakur & Pieter Bevelander, 2016. "Are Residential and Workplace Concentration Correlated for Immigrants? Evidence for Sweden," Journal of International Migration and Integration, Springer, vol. 17(3), pages 687-706, August.
    2. Ather H. Akbari & Azad Haider, 2018. "Impact of Immigration on Economic Growth in Canada and in its Smaller Provinces," Journal of International Migration and Integration, Springer, vol. 19(1), pages 129-142, February.

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