Immigrants and the Canadian Labour Market

1. Immigrants and the Canadian Labour Market Mary Grant Strategic Policy, Planning and Research - CIC Eden Thompson Applied Research Branch, Strategic Policy - HRDC Presentation for the Fifth International Metropolis Conference Vancouver, Canada November 13-17, 2000 NOT FOR QUOTATION The views expressed in this presentation are the authors’ and they do not necessarily reflect the opinions of Citizenship and Immigration Canada, Human Resources Development Canada, or the federal government

2. Immigrants come to Canada within distinct landing categories. Immigration Category % Economic -- individuals (principal applicants) selected for their economic contribution, including skilled workers and business immigrants. Family -- close family members sponsored by a Canadian citizen or resident, including spouses, fiancés, dependent children, parents, and grandparents Refugees -- includes Convention refugees and other displaced persons resettled from abroad, with government assistance or private sponsorship, and persons who have successfully claimed Convention refugee status in Canada. Economic P.A. Economic Sp. & D. Family Govt. Refugee Priv. Refugee In Canada Refugee Other Source: Landed Immigrant Data System (LIDS).

3. Historically, immigrants to Canada have demonstrated consistent and persistent patterns in the labour market. • At landing, the average immigrant earns less than the average Canadian. • Their performance, relative to the average Canadian, improves rapidly through the initial years after landing. • After 10-14 years, the average immigrant catches up to or surpasses the average Canadian. • Employment earnings of economic principal applicants equal or surpass the Canadian average as soon as one year after landing. • These results are observed consistently across landing year cohorts.

4. Immigrants who came to Canada in the 1990s have not performed as well as previous arrivals. Their employment rate is lower and their initial earnings are lower. Patterns of immigrant employment earnings one year after landing (1999 dollars) Economic (principal applicants) Canadian Average Family Economic (spouses and dependents) Refugees Source: Longitudinal Immigration Database (IMDB).

5. The deterioration of employment earnings witnessed for economic principal applicants primarily occurred for males. Patterns of Economic Principal Applicant employment earnings one year after landing, by gender (1999 dollars) Male Canadian Average Male Economic PAs Female Economic PAs Female Canadian Average Source: Longitudinal Immigration Database (IMDB).

6. It is not clear why recent arrivals are experiencing less labour market success than did immigrants who landed in the 1980s. There are likely several factors at work, including: • Economic environment of the 1990s • Absorptive capacity of the labour market (economic environment, credentials recognition, language ability, etc.) • Changing nature of the job market (free trade agreements, technological advances, decreased hiring rate, increased job tenure, etc.) • Changing policy environment (immigration, labour market) • Different countries of origin (credentials recognition, fewer ethnic ‘networks’, language challenges, etc.)

7. The difficult economic environment of the 1990s … Patterns of skilled male immigrant employment earnings 1, 3 and 5 years after landing, by year of landing (1999 dollars) 1 Year 3 Years $ % 5 Years National unemployment rate Year of Landing Source: Longitudinal Immigration Database (IMDB), Labour Force Survey (LFS).

8. … and the labour market’s ability to absorb immigrant inflows may have contributed to the decline in performance. Immigrant landings as a percentage of total Canadian population: 1980-1998 % of total population % National unemployment rate Year of Landing Source: Landed Immigrant Data System (LIDS), Labour Force Survey (LFS).

9. A changing policy environment has also had an impact. Amongst others, changes included: • Shifts in immigration policy • the past 10 years have been Canada’s most sustained period of consistently high levels of immigration • eligibility under the family class was tightened during first half of 1990s • flow of essentially self-selecting refugee claimants increased significantly • Changes to Unemployment/Employment Insurance • Changes to provincial social assistance programs

10. Immigrants landed in the 1990s come from different countries than previous arrivals. Place of birth by immigrant landing year: 1970-1996 % 1970 1980 1990 1996 Europe United States Asia Other Source: 1996 Census.

11. Immigrant employment earnings differ by region of origin. Patterns of immigrant employment earnings one year after landing by region of origin (1999 dollars) Canadian average United States N. & W. Europe E. & S. Europe Africa E. & S.E. Asia S. Asia Source: Longitudinal Immigration Database (IMDB).

12. While the proportion with university level education at landing is relatively similar by region of origin, large disparities are evident among the proportion with low levels of education. Education level at landing by region of origin: A comparison of the 1982 & 1992 landing cohorts (%) Source: Longitudinal Immigration Database (IMDB).

13. The employment earnings of university educated immigrants differ by region of origin. Patterns of university educated (at landing) immigrant employment earnings one year after landing by region of origin (1999 dollars) N. & W. Europe Canadian average United States Africa E. & S.E. Asia E. & S. Europe S. Asia Source: Longitudinal Immigration Database (IMDB), Survey of Consumer Finances (SCF)

14. Relative to traditional countries, there are smaller proportions of skilled workers and larger proportions of refugees from less traditional countries. Composition of immigrant admission category by region of origin: A comparison of the 1982 & 1992 landing cohorts (%) Source: Longitudinal Immigration Database (IMDB).

15. The challenges faced by recent immigrants may be similar to those faced by other new labour market entrants, particularly youth. Both youth and immigrants face similar challenges in the labour market: they lack (Canadian) work experience, are unlikely to have a well established network of contacts, and are often under financial strain. In 1996, the overall unemployment rate of recent immigrants was virtually identical to that of youths: 17% and 18% respectively. The situation in the 1980s was different -- in 1986, the jobless rate was 12% for recent immigrants compared with 17% for youths. (Badets and Howatson-Leo, 1999). Beaudry and Green (1997) find that recent male labour market entrants (both immigrants and youth), regardless of education, are earning dramatically less than their predecessors at the same age.

16. In the late 1990s, the youth unemployment rate, as well as that for all workers, fell. National unemployment rates (1980-1999) % Youth (15-24) All workers (15+) Source: Labour Force Survey (LFS).

17. Given the turnaround in economic fortunes, structural changes within the 1990s labour market and the high skills of recent immigrants, what performance outcome do we expect for recent landings? If the poor labour market performance of recent immigrants was a transitional phenomenon, due largely to the weak Canadian labour market, it follows that as the labour market improves, so does the performance of recent immigrants. However, if the poor labour market performance of recent immigrants was a permanent phenomenon, due largely to characteristics of recent landing cohorts, credentials recognition problems and structural changes such as decreased hiring rates and increased job tenure, it follows that as the labour market improves, the benefits are not shared equally among recent immigrants and native-born workers.

18. Newly released data indicate that the initial employment earnings of recent immigrants have remained steady. Patterns of immigrant employment earnings one year after landing (1999 dollars) Economic (principal applicants) Canadian Average Family Economic (spouses and dependents) Refugees Source: Longitudinal Immigration Database (IMDB).

19. Although entry earnings have remained steady, more recent cohorts have higher earnings growth. Cohort employment earnings growth of Economic Principal Applicants (1999 Dollars) 1980 Cohort 1982 Cohort 1986 Cohort 1988 Cohort 1990 Cohort 1984 Cohort Canadian Average Initial Earnings 1992 Cohort 1994 Cohort Source: Longitudinal Immigration Database (IMDB).

20. Research to be done in this area. Foreign credential recognition Language Better documentation of performance and settlement experiences Performance by category of admission

21. This session Economic performance of immigrants in Canada and other countries. Learn from the experiences (similarities/differences) of recent immigrants in other countries. The first of two sessions, the second of which will focus on institutional factors ‘at work’ in different countries.