Citizenship and the economic outcomes of immigrants in Canada

Previous research indicates that immigrants who obtain citizenship in the receiving country gain various benefits, including enhanced legal status, expanded rights, increased political and civic engagement, and a stronger sense of collective identity and belonging. However, empirical studies remain inconclusive on whether acquiring citizenship improves immigrants’ labour market outcomes. This paper asks two questions. First, is Canadian citizenship correlated with better economic outcomes among immigrants in Canada? Second, if so, does citizenship acquisition lead to an improvement in labour market outcomes? The answer to the first question is yes. Immigrants who became citizens had higher earnings, had higher employment levels and were more likely to be employed in the public sector than their counterparts who did not become citizens. The answer to the second question is no. Using longitudinal data and a fixed-effects regression model, the study finds little evidence that the act of citizenship acquisition directly resulted in the observed positive correlation between citizenship and economic outcomes. Immigrants who became citizens economically outperformed those who did not, mostly because immigrants who chose to become citizens possessed other characteristics (such as unmeasured skills and motivations) that resulted in their better economic outcomes.