Occupational Upgrading and Within-Occupation Wage Gaps: Immigrant Earnings Integration in Canada, 2006–2021

This paper studies immigrant earnings integration in Canada using Labour Force Survey data from 2006 to 2021 and an empirical framework that separately models actual wages, counterfactual wages predicted from age- and gender-specific native wage profiles within detailed occupations, and the within-occupation wage gap between actual and predicted wages. This separation allows us to distinguish wage growth driven by occupational upgrading from within-occupation wage convergence. We find that years since migration are associated with substantial wage growth, primarily through movement into higher-paying occupations rather than rapid wage catch-up within occupations. While within-occupation wage gaps do narrow modestly over time, convergence along this margin remains slow and incomplete. These patterns are robust across gender and immigrants’ region of origin. The results indicate that persistent wage gaps are primarily associated with limited access to high-paying occupations rather than differential pay within jobs alone. This highlights occupational placement and the transferability of human capital as central margins along which immigrant earnings integration unfolds in Canada.