Study: Selecting economic immigrants from among temporary foreign workers and labour market outcomes by admission programs

Released: 2020-08-18

Statistics Canada is releasing the last two of a series of five studies that provide a broad overview of the increasing importance of temporary foreign workers in the selection and labour market outcomes of new immigrants in Canada. These studies are conducted in collaboration with Immigration, Refugees and Citizenship Canada.

Canada selects economic immigrants through various programs, including the Federal Skilled Worker Program (FSWP), the Provincial Nominee Program (PNP) and the Canadian Experience Class (CEC).

Previous research has shown that the last two groups fare better in the labour market than the first one, at least in the initial years after immigration. The difference stems largely from the fact that proportionately more economic immigrants selected from the PNP and the CEC were former temporary foreign workers, according to the first study released today.

The study, titled "Two-step immigration selection: Why did immigrant labour market outcomes vary by admission programs?," shows that from 2009 to 2016, about two-thirds of immigrants selected from the PNP and essentially all immigrants selected from the CEC were former temporary foreign workers, i.e. had employment earnings in Canada before obtaining their permanent residence.

In contrast, about one-quarter of their counterparts selected from the FSWP were former temporary foreign workers.

Since having worked in Canada before obtaining one's permanent residence is associated with higher employment incidences and earnings, the fact that a relatively high proportion of immigrants selected from the PNP and the CEC worked in Canada in the past explains to a large extent their better labour market outcomes.

For example, 93% of immigrants selected from the PNP and 95% of immigrants selected from the CEC found employment in the first full year after obtaining permanent residency. The corresponding percentage for their FSWP counterparts was substantially lower, at 80%.

The study shows that the greater propensity to have worked in Canada in the past accounts for about 40% of the 13-percentage-point difference observed between immigrants selected from the PNP and the FSWP. It also accounts for about two-thirds of the 15-percentage-point difference observed between immigrants selected from the CEC and the FSWP.

The relatively high proportion of PNP and CEC immigrants who had previous work experience in Canada also explains why these groups earn more than their FSWP counterparts. It accounts for at least 94% of the earnings differences observed between these groups, on the one hand, and immigrants selected from the FSWP, on the other hand, during the first year after immigration.

Likewise, the greater propensity to have worked in Canada in the past accounts to a large extent for the differences in employment incidences and earnings observed between the three groups, five years after immigration.

Chart 1 
Average annual earnings in the first full year after immigration among principal applicants who landed between 2009 and 2016, by admission program

The second study, titled "Two-step immigration selection: Skilled work experience vs. pre-arranged jobs," focuses on the economic immigrants who were selected under Canada's Express Entry system in 2015 and 2016. It compares the degree to which Canadian work experience before immigration and pre-arranged employment at the time of application predict the initial labour market outcomes of these economic immigrants.

Both Canadian work experience and pre-arranged employment are key criteria underlying Canada's Express Entry system of economic immigration selection.

The study shows that Canadian work experience appears to be a better predictor of initial labour market outcomes than pre-arranged employment.

Economic immigrants who had pre-arranged employment displayed, in the first two years after immigration, employment incidences that were similar to those of other economic immigrants selected under the Express Entry system.

In contrast, economic immigrants who had worked in Canada before immigrating and who had received relatively high annual earnings while doing so (over $50,000 in 2017 dollars) had employment incidences that were 8 percentage points higher than those of other economic immigrants without Canadian work experience.

Canadian work experience was also a stronger predictor of initial earnings after immigration than pre-arranged employment.

Even after controlling for education, among other factors, immigrants with a pre-arranged job earned 15% more than those without a pre-arranged job in the first two years after immigration. However, immigrants who had received high earnings in Canada before immigrating earned almost twice as much as those who had no Canadian work experience.

Products

The research articles titled "Two-step Immigration Selection: Why Did Immigrant Labour Market Outcomes Vary by Admission Programs?" and "Two-step Immigration Selection: Skilled Work Experience vs. Pre-arranged Jobs," part of the Economic Insights Series (Catalogue number11-626-X), are now available.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

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