IDEAS home Printed from https://ideas.repec.org/p/bca/bocadp/25-08.html

The Shift in Canadian Immigration Composition and its Effect on Wages

Author

Listed:
  • Julien Champagne
  • Antoine Poulin-Moore
  • Mallory Long

Abstract

We document recent changes in Canadian immigration, marked by an increasing prevalence of temporary residency. Using microdata from Statistics Canada's Labour Force Survey, we show that temporary workers' characteristics and nominal wages have diverged from those of Canadian-born workers. Between 2015 and 2024, temporary workers have become younger, less experienced and more likely to migrate from lower-income countries. As well, the shares of temporary workers in skilled occupations have declined moderately. Throughout this period, the average nominal wage gap between temporary and Canadian-born workers has more than doubled, widening from -9.5% to -22.6%. Further, we estimate Mincer regressions to assess how these evolving characteristics have contributed to the growing wage gap. Our findings show that this increase can be explained by observable characteristics. Our results suggest that aggregate nominal wages would have been, on average, 0.7% higher in 2023–24 had the characteristics of temporary workers remained unchanged over the past decade.

Suggested Citation

  • Julien Champagne & Antoine Poulin-Moore & Mallory Long, 2025. "The Shift in Canadian Immigration Composition and its Effect on Wages," Discussion Papers 2025-08, Bank of Canada.
    • Handle: RePEc:bca:bocadp:25-08
    DOI: 10.34989/sdp-2025-8
    as

    Download full text from publisher

    File URL: https://doi.org/10.34989/sdp-2025-8
    File Function: Abstract
    Download Restriction: no
    File URL: https://www.bankofcanada.ca/wp-content/uploads/2025/05/sdp2025-8.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.34989/sdp-2025-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Busch, Christopher & Krueger, Dirk & Ludwig, Alexander & Popova, Irina & Iftikhar, Zainab, 2020. "Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave," Journal of Monetary Economics, Elsevier, vol. 113(C), pages 28-55.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaschke Philipp & Sulin Sardoschau & Marco Tabellini, 2021. "Scared Straight? Threat and Assimilation of Refugees in Germany," RFBerlin Discussion Paper Series 2136, ROCKWOOL Foundation Berlin (RFBerlin).
    2. Joan Llull, 2021. "Immigration and Gender Differences in the Labor Market," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 174-203.
    3. Sachs, Dominik & Colas, Mark, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CEPR Discussion Papers 15325, C.E.P.R. Discussion Papers.
    4. Florio, Erminia & Kharazi, Aicha, 2022. "Curtailment of Economic Activity and Labor Inequalities," GLO Discussion Paper Series 1166, Global Labor Organization (GLO).
    5. Zaharieva, Anna & Iftikhar, Zainab, 2024. "Job Search, Entrepreneurship and Labour Market Outcomes of Natives and Immigrants in Germany," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302348, Verein für Socialpolitik / German Economic Association.
    6. Zainab Iftikhar & Anna Zaharieva, 2025. "Problem or Opportunity? Immigration, Job Search, Entrepreneurship and Labor Market Outcomes Of Natives in Germany," CRC TR 224 Discussion Paper Series crctr224_2025_714, University of Bonn and University of Mannheim, Germany.
    7. Colas, Mark & Sachs, Dominik, 2022. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Rationality and Competition Discussion Paper Series 352, CRC TRR 190 Rationality and Competition.
    8. Olovsson, Conny & Walentin, Karl & Westermark, Andreas, 2025. "Dynamic macroeconomic implications of immigration," Journal of Monetary Economics, Elsevier, vol. 151(C).
    9. Andri Chassamboulli & Xiangbo Liu, 2024. "Immigration, Legal Status and Fiscal Impact," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 54, October.
    10. Mayda, Anna Maria & Senses, Mine & Steingress, Walter, 2023. "Immigration and Provision of Public Goods: Evidence at the Local Level in the US," CEPR Discussion Papers 18054, C.E.P.R. Discussion Papers.
    11. Tassi, Annalisa, 2024. "Do community needs affect the decision to volunteer? The case of refugees in Germany," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
    12. Michael A Clemens, 2022. "The economic and fiscal effects on the United States from reduced numbers of refugees and asylum seekers," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 449-486.
    13. Philipp Jaschke & Sulin Sardoschau & Marco Tabellini, 2023. "Scared Straight? Threat and Assimilation of Refugees in Germany," Rationality and Competition Discussion Paper Series 384, CRC TRR 190 Rationality and Competition.
    14. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CESifo Working Paper Series 8604, CESifo.
    15. Michael Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," CESifo Working Paper Series 9464, CESifo.
    16. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Opportunity and Inclusive Growth Institute Working Papers 38, Federal Reserve Bank of Minneapolis.
    17. Sagiri KITAO & Nozomi TAKEDA, 2025. "Endogenous Migration and the Macroeconomic Impact of Foreign Workers in Japan," Discussion papers 25110, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bca:bocadp:25-08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bocgvca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.