Study: Labour market outcomes before and after acquisition of permanent residence by temporary foreign workers

Released: 2017-09-21

Temporary foreign workers are an important source of labour in Canada. They can quickly fill local or occupational skill shortages, and some go on to become permanent residents. The acquisition of permanent residence can remove restrictions on job mobility and may improve the wage-bargaining position and job opportunities of these individuals.

A new Statistics Canada study assesses whether this is the case by examining changes in employment and earnings of temporary foreign workers in the years before and after their transition to permanent residence. It finds that the outcomes of temporary foreign workers varied considerably by type of work permit and skill level.

The study is based on Statistics Canada's Canadian Employer-Employee Dynamics Database file that links employees, including temporary residents and immigrants with their jobs and employers. The study focuses on temporary foreign workers who were aged 25 to 40 at arrival and became landed immigrants in the late 1990s and 2000s. The employment characteristics of these individuals were tracked for up to five years before their transition to permanent residence, and for up to five years after.

High-skilled temporary foreign workers, including those who were generally tied to one specific employer or occupation by a restricted work permit, did not experience an increase in employment rates or additional earnings growth after the acquisition of permanent residence. These individuals already had high employment rates and high earnings even before their acquisition of permanent residence.

These results suggest that restrictions to specific employers did not necessarily put these high-skilled temporary foreign workers at a disadvantage, perhaps because their skills were in strong demand internationally.

In contrast, employment rates and earnings clearly increased among temporary foreign workers who held open work permits and had mixed skill levels. Among this group were individuals involved in reciprocal employment as well as the spouses and common-law partners of foreign workers or foreign students. These temporary foreign workers had much lower employment rates and earnings before the acquisition of permanent residence than high-skilled temporary foreign workers, and gained more following the acquisition of permanent residence.

Products

The research paper "Acquisition of Permanent Residence by Temporary Foreign Workers in Canada: A Panel Study of Labour Market Outcomes Before and After the Status Transition," part of the Analytical Studies Branch Research Paper Series (Catalogue number11F0019M), is now available.

The Canadian Employer-Employee Dynamics Database is available for use by researchers in the Canadian Centre for Data Development and Economic Research in Ottawa.

Contact information

For more information contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact Feng Hou (613-608-4932; feng.hou@canada.ca), Social Analysis and Modelling Division.