Do the falling earnings of immigrants apply to self-employed immigrants?
by
Marc Frenette
Business and Labour Market Analysis Division
Analytical Studies
Branch research paper series, No. 195
It is well known that labour market
outcomes of immigrants have been declining over the last two decades. The vast
majority of studies focus on outcomes in paid employment. During much of the 1990s
there was little full-time job creation, and both immigrants and the native born
increasingly turned to self-employment. This study investigates the change in
labour market outcomes for immigrants who entered self-employment, using census
data.
In paid jobs, recent immigrants earned about 16% less than Canadian-born
workers in 1980. By 1990, a similar point in the economic cycle, this gap had
grown to about 28%. Between 1985 and 1995 (two similar points in the economic
cycle), the earnings gap between recent immigrants and Canadian-born workers in
paid jobs increased from 27% to 38% . This comparison is between all employed
recent immigrants and all employed native born, but the story holds when controlling
for differences in age, education, visible minority status, family type and geography.
As
the earnings of recent immigrants in paid jobs were declining, more and more recent
immigrants were turning to self-employment. In 1981, about 8% of recent immigrant
workers were self-employed. By 1996, this proportion had almost doubled to 14%.
In
self-employed jobs, the earnings gap between recent immigrants and Canadian-born
workers rose during the 1980s (from 13% in 1980 to 20% in 1990), but showed little
change between 1985 and 1995, holding steady at 27% to 28%. Hence, relative to
the native-born, self-employed immigrants fared somewhat better during the 90s
than their paid-employed counterparts. However, in absolute terms, earnings fell
throughout the period for recent immigrants who were both self-employed and paid
workers. In that sense, the story was very similar for both groups.
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