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The Rise in Low-income Rates Among Immigrants in Canada

  • Hou, Feng
  • Picot, Garnett
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    This study uses census data to focus on low-income among immigrants, and asks a number of questions: (1) have low-income rates increased among successive cohorts of entering immigrants, both in absolute terms and relative to the Canadian born (they have), (2) is this increase due to changes in their characteristics (e.g. education, age, source country, language etc.), (3) do low-income rates fall as new immigrants acquire Canadian experience, and are there signs that low-income rates fall faster among the more recent entering cohorts with the higher entry level rates, resulting in some "catch-up", and (4) in the major Canadian cities, to what extent was the deterioration in the city level low-income rates during the 1990s concentrated among immigrants? The analysis covers the period from 1980 to 2000, and focuses on change between 1980 to 1990, and 1990 to 2000, years that are roughly at business cycle peaks. The study finds that low-income rates among "recent" immigrants (in Canada for less than five years) almost doubled between 1980 and 1995, and then fell during the strong recovery of the late 1990s. However, when focusing on outcomes at business cycle peaks (1980, 1990 and 2000) to establish comparable long-term, low-income rates rose continuously for each successive cohort of immigrants. Furthermore, the gap at entry in their low-income rate relative to the Canadian-born also rose over the 1980-2000 period. The changing composition of "recent" immigrants with respect to language, source country, family type and age accounted for, at most, half of the rise in the low-income rate among this group, and likely substantially less than that. Most of the increase was a result of the widespread rise in low-income among recent immigrants in all age groups, family types, language groups, education groups, and most of the more significant (numerically) source regions, notably Africa and the Asian source regions. The peak to peak rise in the low-income rate between 1980 and 2000 was not restricted to recent immigrants, and was observed (to a lesser extent) among immigrants who had been in Canada for up to 20 years. Low-income rates among immigrants tend to fall with time spent in Canada. Furthermore, among the more recent entering cohorts with the higher low-income rates at entry, the rate of decline is faster. There is evidence of a "catch-up" (to earlier cohorts) among the more recent entering cohorts. However, low-income rates remain higher among immigrant cohorts of the late 1980s and early 1990s than among their counterparts in the 1970s (comparing groups with a comparable number of years in Canada). The rise in the low-income rates in the three major Canadian cities, and in Ontario and B.C. during the 1990s in particular, was largely concentrated among the immigrant population. Basically, low-income rates have been falling over the past two decades among the Canadian born, and rising among immigrants. A discussion of

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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11F0019M2003198&ObjType=46&lang=en&limit=0
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    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2003198e.

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    Date of creation: 19 Jun 2003
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    Handle: RePEc:stc:stcp3e:2003198e
    Contact details of provider: Postal: Tunney's Pasture, Ottawa, Ontario, K1A 0T6
    Web page: http://www.statcan.gc.ca

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    1. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 378-396, December.
    2. Christopher Worswick, 1999. "Credit Constraints and the Labour Supply of Immigrant Families in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 152-170, February.
    3. Picot, Garnett & Heisz, Andrew, 2000. "The Performance of the 1990s Canadian Labour Market," Analytical Studies Branch Research Paper Series 2000148e, Statistics Canada, Analytical Studies Branch.
    4. Francine D. Blau & John W. Graham, 1990. "Black-White Differences in Wealth and Asset Composition," NBER Working Papers 2898, National Bureau of Economic Research, Inc.
    5. David E. Bloom & Morley Gunderson, 1991. "An Analysis of the Earnings of Canadian Immigrants," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 321-342 National Bureau of Economic Research, Inc.
    6. George J. Borjas, 1988. "Immigration And Self-Selection," NBER Working Papers 2566, National Bureau of Economic Research, Inc.
    7. David E. Bloom & Gilles Grenier & Morley Gunderson, 1994. "The Changing Labor Market Position of Canadian Immigrants," NBER Working Papers 4672, National Bureau of Economic Research, Inc.
    8. James Ted McDonald & Christopher Worswick, 1997. "Unemployment Incidence of Immigrant Men in Canada," Canadian Public Policy, University of Toronto Press, vol. 23(4), pages 353-373, December.
    9. Garnett Picot & Andrew Heisz, 2000. "The Performance of the 1990s Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 7-25, July.
    10. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
    11. Worswick, C., 1996. "Immigrant Families in Canadian labour Market," Department of Economics - Working Papers Series 504, The University of Melbourne.
    12. George J. Borjas, 1993. "Immigration Policy, National Origin, and Immigrant Skills: A Comparison of Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 21-44 National Bureau of Economic Research, Inc.
    13. Worswick, C. & Beach, C.M., 1990. "Is There a Double-Negative Effect on the Earnings of Immigrant Women?," Papers 1990-6, Queen's at Kingston - Sch. of Indus. Relat. Papers in Industrial Relations.
    14. Baker, Michael & Benjamin, Dwayne, 1997. "The Role of the Family in Immigrants' Labor-Market Activity: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 87(4), pages 705-27, September.
    15. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, October.
    16. 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.
    17. Ana Ferrer & W. Craig Riddell, 2008. "Education, credentials, and immigrant earnings," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 186-216, February.
    18. James Ted McDonald & Christopher Worswick, 1998. "The Earnings of immigrant men in Canada: Job tenure, cohort, and macroeconomic conditions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 465-482, April.
    19. Lars Osberg, 2000. "Poverty in Canada and the United States: measurement, trends, and implications," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 847-877, November.
    20. Bloom, D.E. & Gunderson, M., 1989. "An Analysis Of The Earnings Of Canadian Immigrants," Discussion Papers 1989_18, Columbia University, Department of Economics.
    21. 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.
    22. Yves Gingras & Richard Roy, 2000. "Is There a Skill Gap in Canada?," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 159-174, July.
    23. Geoffrey Carliner, 1981. "Wage Differences by Language Group and the Market for Language Skills in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 16(3), pages 384-399.
    24. Arnold de Silva, 1997. "Immigrant Participation in the Unemployment Insurance System," Canadian Public Policy, University of Toronto Press, vol. 23(4), pages 375-397, December.
    25. Mary L. Grant, 1999. "Evidence of New Immigrant Assimilation in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 930-955, August.
    26. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    27. 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.
    28. Michael Baker & Dwayne Benjamin, 1995. "The Receipt of Transfer Payments by Immigrants to Canada," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 650-676.
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