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Explaining the Deteriorating Entry Earnings of Canada’s Immigrant

Author

Listed:
  • Abdurrahman Aydemir

    (Family & Labour Studies Division, Statistics Canada)

  • Mikal Skuterud

    (Family & Labour Studies Division, Statistics Canada)

Abstract

The study explores causes of the deterioration in entry earnings of Canadian immigrant cohorts by estimating an empirical specification that nests a number of competing explanations found in the Canadian literature. To do this, we use the pooled sample of Canadian-born and immigrant men employed full-year, full-time from the complete 20 percent samples of the 1981, 1986, 1991, 1996 and 2001 Canadian Censuses. Our results indicate that no more than one-third of the deterioration can be explained by compositional shifts in the knowledge of an official language, mother tongue and region of origin of recent immigrant cohorts. We also find little or no evidence that declining returns to foreign education are responsible. Roughly one-third of the deterioration appears to be due to a persistent decline in the returns to foreign labour market experience which has occurred almost exclusively among immigrants originating from non-traditional source countries. We are able to explain two-thirds of the overall decline in the entry earnings of Canada’s most recent immigrants without any reference to entry labour market conditions. When we also account for entry conditions, our results suggest that Canada’s immigrants who arrived in the 1995-1999 period would otherwise be enjoying entry earnings that were significantly higher than the entry earnings of the 1965-1969 cohort.

Suggested Citation

  • Abdurrahman Aydemir & Mikal Skuterud, 2004. "Explaining the Deteriorating Entry Earnings of Canada’s Immigrant," Labor and Demography 0409006, EconWPA.
  • Handle: RePEc:wpa:wuwpla:0409006
    Note: Type of Document - pdf; pages: 32
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/lab/papers/0409/0409006.pdf
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    References listed on IDEAS

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    1. Frenette, Marc & Morissette, Rene, 2003. "Will They Ever Converge? Earnings of Immigrants and Canadian-born Workers over the Last Two Decades," Analytical Studies Branch Research Paper Series 2003215e, Statistics Canada, Analytical Studies Branch.
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    Cited by:

    1. Alain Bélanger & Nicolas Bastien, 2013. "The Future Composition of the Canadian Labor Force: A Microsimulation Projection," Population and Development Review, The Population Council, Inc., vol. 39(3), pages 509-525, September.
    2. repec:eme:rleczz:s0147-9121(07)00006-4 is not listed on IDEAS
    3. Abdurrahman Aydemir & Arthur Sweetman, 2007. "First- and Second-Generation Immigrant Educational Attainment and Labor Market Outcomes: A Comparison of the United States and Canada," Research in Labor Economics,in: Immigration, volume 27, pages 215-270 Emerald Publishing Ltd.
    4. Kristyn Frank & Kelli Phythian & David Walters & Paul Anisef, 2013. "Understanding the Economic Integration of Immigrants: A Wage Decomposition of the Earnings Disparities between Native-Born Canadians and Recent Immigrant Cohorts," Social Sciences, MDPI, Open Access Journal, vol. 2(2), pages 1-22, April.
    5. Sylvia Fuller & Leah Vosko, 2008. "Temporary Employment and Social Inequality in Canada: Exploring Intersections of Gender, Race and Immigration Status," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 88(1), pages 31-50, August.
    6. Fang, Tony & Samnani, Al-Karim & Novicevic, Milorad M. & Bing, Mark N., 2013. "Liability-of-foreignness effects on job success of immigrant job seekers," Journal of World Business, Elsevier, vol. 48(1), pages 98-109.
    7. Daniel Hiebert, 2006. "Winning, Losing, And Still Playing The Game: The Political Economy Of Immigration In Canada," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 97(1), pages 38-48, February.
    8. Hou, Feng, 2008. "Immigrants Working with Co-ethnics: Who Are They and How Do They Fare Economically?," Analytical Studies Branch Research Paper Series 2008310e, Statistics Canada, Analytical Studies Branch.
    9. Gilles Grenier & Serge Nadeau, 2010. "Why is Immigrants’ Access to Employment lower in Montreal than in Toronto?," Working Papers 1005E, University of Ottawa, Department of Economics.
    10. Marc Frenette, 2011. "How does the stork delegate work? Childbearing and the gender division of paid and unpaid labour," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 895-910, July.

    More about this item

    Keywords

    immigration; entry earnings; cohort effects; earnings assimilation; credentials;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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