Study: The socio-economic progress of the children of immigrants

The earnings of second-generation Canadians is only loosely tied to the socio-economic status of their parents, according to a new study that investigates the link between the socio-economic status of immigrant fathers and their Canadian born sons and daughters.

In other words, low earnings in childhood on average does not imply low earnings in adulthood.

The study found only a loose association in earnings between the generations, implying that the children of immigrants with below average earnings can be expected to make significant gains in earnings in adulthood.

On average, only about one-fifth to one-quarter of any earnings advantage or disadvantage an immigrant father may have is passed on to his son, according to the study, which used data from the 2001 and 1981 censuses.

This is no different than among the Canadian population at large, and it is lower by half than in the United States.

Further, there is no correlation at all between paternal earnings and the adult earnings of daughters.

These findings suggest that notwithstanding the financial challenges that past groups of immigrants have faced, their children have on average done well.

Second generation children more educated, earn more on average

Second-generation children in Canada are more educated and earn more on average than Canadians of a similar age whose parents were both born in Canada, according to the study.

Previous studies have shown that in Canada, recent groups of immigrants have earned as much as 50% to 60% less than their Canadian-born counterparts upon arrival in the country. The consequence of this is that low-income rates among recent immigrants are high, and getting higher.

A good deal of "generational mobility" in earnings may imply that disadvantages in childhood will not echo into adulthood. On the other hand, a lack of mobility between generations would suggest that the consequences of low income in the present would be even more costly, as the next generation would grow up to be low-income adults.

The results of the study refer to a group of young Canadians whose parents came to Canada before 1981 and who came of age in the context of the education system of the 1980s and the labour market of the 1990s. The study did not directly address the extent to which these patterns will continue to hold for more recent cohorts of immigrants and their children.

The study showed that Canadian-born men aged 25 to 37 who stated that their parents were born outside of Canada had more years of schooling and a greater likelihood of holding a university degree than Canadians of the same age whose parents were born in the country.

Except for those whose fathers were from the Caribbean, Central and South America, and Oceania, they also had higher weekly earnings. The earnings advantage was about 6%, except for those from the traditional source countries, where it was more than twice as great at 14%.

A similar picture emerged for daughters, though in this case there was an education and earnings advantage regardless of the origins of the parents.

But there was a good deal of diversity underlying these average tendencies according to the country of the parents' origin. Immigrant fathers with below average earnings were born in every region of the world, and in many cases their sons had above average earnings as adults.

The study also found that even though paternal earnings were not strongly associated with the adult earnings of daughters, the fathers education was an important influence. Fathers from immigrant communities with high levels of education are able to promote the education and labour market success of their daughters.

Second-generation Canadians have significant share of the population

Second-generation Canadians are a significant proportion of the adult population. In 2001, just over 7% of the population was Canadian-born with both parents born in another country, and a further 7% to 8% had one parent born in another country.

Just over one-third (35%) of Canada's population aged 16 to 65 at that time consisted of immigrants or the children of immigrants.

Second generation Canadians with either one or both parents born elsewhere were less likely to lack high school credentials and more likely to have a university degree than Canadian-born individuals with Canadian-born parents.

The labour market engagement of second generation Canadians was not any different than for those with both parents born in the country. For women there was, in fact, a higher likelihood of working in paid employment. Average annual earnings tended to be higher among immigrant and second generation men, and noticeably more so for women.

Canadian-born women whose parents were born outside of Canada earned on average just over $27,000 in 2000 or about $630 per week. In contrast, those with Canadian-born parents made less than $25,000 or about $575 per week.

Rates of employment and unemployment were no different among the second generation population than among those with Canadian-born parents.

At the same time, reliance on Employment Insurance and other employment related government transfer payments was lower for second generation men and women.

About 15% of second generation Canadians received some Employment Insurance payments in 2000, compared to just over 20% of other Canadians born in the country with Canadian-born parents.

About 98% of second generation Canadians with one parent born elsewhere used either English or French at home. This was noticeably lower for Canadian-born individuals with both parents being immigrants. About 80% of these individuals used either English or French at home.

Further, those with both parents born outside of Canada were less likely to be married. If they were married, they were much more likely than their counterparts with Canadian-born parents to have a spouse who was either an immigrant or also a second generation Canadian.

Definitions, data sources and methods: survey number 3901.

The research paper "Intergenerational earnings mobility among the children of Canadian immigrants" (11F0019MIE2005267) is now available for free online. From the Our products and services page, under Browse our Internet publications, choose Free, then Social conditions.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Miles Corak (613-951-9047), Family and Labour Studies.