Cumulative earnings of Black, Chinese, South Asian and White individuals born in Canada

Previous studies of earnings differences across groups of Canadian-born individuals have used cross-sectional data, leaving unanswered the important question of what earnings differences amount to when measured over workers’ lifecycle. Using data from Statistics Canada’s Longitudinal Worker File and the 1996 and 2001 censuses of population, this study fills this gap and quantifies differences in cumulative earnings—the sum of earnings received over a 20-year period—for four different groups of Canadian-born individuals. The study shows that the higher cumulative earnings of Chinese (+20%) and South Asian (+15%) men (relative to White men) can be mostly or entirely accounted for by their higher education levels and their overrepresentation in science, technology, engineering, and mathematics (STEM) fields of study. Conversely, the lower cumulative earnings of Black men (relative to White men) cannot be accounted for by differences in sociodemographic characteristics, human capital, job characteristics or work histories. The higher cumulative earnings of Chinese and South Asian women relative to White women can be explained mostly or entirely by cross-group differences in these observable factors, the most important being education and representation in STEM fields. By contrast, Black and White women had similar cumulative earnings over the 20-year periods considered.