Will they ever converge: Earnings of immigrant
and Canadian-born workers over the last two decades
by Marc Frenette and
René Morissette
Business and Labour Market Analysis Division
Analytical
Studies Branch research paper series, No. 215
Context
The convergence
of earnings of immigrants to those of Canadian-born workers is a relevant policy
issue since it has implications for earnings inequality, poverty dynamics and
social cohesion.
Objective
This paper attempts to answer the following
questions:
Will today's recent immigrant achieve earnings parity with Canadian-born
workers less rapidly than earlier cohorts?
What outcomes are necessary
to achieve earnings convergence with Canadian-born workers in the coming years?
Findings
Despite a massive increase in their educational
attainment, recent immigrant men employed on a full-year, full-time basis saw
their real earnings fall 7% on average from 1980 to 2000. During the same period,
the real earnings of Canadian-born men went up 7%. Earnings of recent immigrant
women rose over the period, but not as quickly as among Canadian-born women.
As
a result, the gap between the pay rates of recent immigrant men and those of their
Canadian-born counterparts has widened substantially.
This growing gap
suggests that unless they experience a marked improvement in their earnings in
the near future, male immigrants who arrived during the late 1990s will need more
time than their predecessors to achieve earnings parity with Canadian-born workers.
While the factors underlying the growing earnings gap between recent immigrants
and their Canadian-born counterparts are still largely unknown, some explanations
can be ruled out: these include diverging changes in educational attainment, the
performance of the Canadian labour market in 1980 and 2000, and changes in the
age structure of recent immigrants
Real earnings of young Canadian-born
men have also dropped substantially during this period. This suggests that the
problems faced by recent immigrant men may not be unique to them. Rather, they
may have an impact on all new entrants to the Canadian labour market, whether
or not they are born in Canada.
Since the poorer performance of recent
immigrants was observed mainly among prime-aged workers, problems faced by recent
immigrants appear to affect mainly individuals with substantial foreign work experience.
Data Source : Census Data, 1980-2000.
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