As the earnings gap between recent immigrants and Canadian-born workers widens, concerns are being expressed about how rapidly immigrants are integrating into the Canadian labour market and their economic well-being in general. In order to address these problems, we need to better understand the factors affecting the economic outcomes of immigrants to Canada. To that end, Michael Abbott and Charles Beach examine annual earnings outcomes of immi- grants who arrived as permanent residents in 1982, 1988 and 1994, for their first decade, in four admission categories — skills-assessed principal applicants entering under the Federal Skilled Worker Program (independent economic immigrants), other economic immigrants, family class immigrants and refugees. This research allows the authors to compare the outcomes of skills-assessed immigrants with those of immigrants who entered in other classes, and to examine the impact of economic cycles on immigrants’ earnings. They are thus able to provide a more complete picture of newcomers’ economic integration outcomes than have other researchers in this field to date.
The analysis reveals several major findings. First, skills-assessed independent economic immigrants, both male and female, consistently and substantially had the highest median annual earnings among the four admission categories in all three landing cohorts. Among female immigrants, those in the family class had the lowest median earnings in all three cohorts; among male immigrants, those in the family class had the lowest median earnings in the 1982 cohort, while those in the refugee category generally had the lowest median earnings in the 1988 and 1994 cohorts. Second, male and female refugees in all three landing cohorts consistently had the highest earnings growth rates over their first 10 years in Canada. Third, the recession of the 1990s appears to have led to reductions in the level and growth of immigrant earnings, particularly for males.
Drawing on their findings, the authors focus on three aspects of Canadian immigration policy. First, given the improvement over time in the earnings of independent economic immigrants, Canada should continue to assign a substantial weight to skills-assessed immigration and reverse the past decade’s decline in the proportion of new permanent immigrants who are admitted in the federal skilled worker category. Second, considering the relatively rapid growth in refugees’ earnings, immigration in this class should be restored to the levels of the past 30 years — namely, around 10 to 15 percent of annual permanent resident immigration. Third, in light of the evidence that the 1990-91 recession had a marked negative effect on the levels and growth of the earnings of immigrants who arrived in Canada shortly before that period, the federal government should consider reducing total immigrant admission levels during periods of high unemployment and slow economic growth.
- Do Admission Criteria and Economic Recessions Affect Immigrant Earnings?