Exploring the relationship between educational credentials and the earnings of immigrants (original) (raw)
Related papers
Education, credentials, and immigrant earnings
Canadian Journal of Economics/Revue canadienne d'économique, 2008
The extent to which the education and skills of immigrants are utilized and rewarded in the labour market is a major policy issue. This study examines how the human capital of immigrants is rewarded in the Canadian labour market. In order to focus on immigrants' credentials, we distinguish between two dimensions of educational attainment: years of completed schooling and degrees, diplomas or certificates received. Doing so allows us to estimate "sheepskin" effects-the gain in earnings associated with receipt of a degree or diploma, controlling for years of schooling. Using data from the 1981, 1986, 1991 and 1996 Censuses, we study the evolution of the returns to the human capital of immigrant and native-born workers in Canada. Like earlier studies, we find that the work experience of immigrants in their country of origin is valued much less than the experience of comparable native-born workers. A similar result holds for the years of schooling of immigrants. However, the estimated sheepskin effects for immigrants are generally higher than those of native-born Canadians. Thus, the frequently heard claim that the credentials of immigrants are not recognized needs to be treated with some caution. For immigrants the increase in earnings associated with completing an educational program is higher than that of a comparable native born worker. JEL codes: J15, I2 * An earlier version of this paper was presented at the Canadian Economics Association meetings and at the UBC Applied Microeconomics workshop. We are grateful to David Green, Christopher Worswick and Arthur Sweetman for valuable comments and suggestions and to the SSHRC for research support.
Education in Canada's federal system for economic (skilled) class immigrant selection is treated as if it is homogeneous and only differs in quantity. In contrast, some provinces differentiate based on postsecondary field of study. This study finds large economic implications of field of study. It explores the issue for each sex, and for two subgroups of immigrants depending upon whether their education was obtained in Canada or elsewhere. Overall, large differences in the distribution of fields of study are observed between both immigrant groups and the Canadian born. For all groups there are also substantial differences in earnings and social benefit receipt across fields. On average, individuals in high earnings fields, but at lower levels of education, have greater earnings than those with higher levels of education in low earnings fields. This suggests that viewing education strictly as a quantity, and ranking a college diploma as worth fewer points than a university degree in the immigration points system, ignores important and systematic heterogeneity across fields.
The United States and Canada are destination countries for immigrants, attracting more than half of all Organization for Economic Cooperation and Development (OECD) immigrants and two-thirds of the OECD immigrants who have received tertiary education. Initial comparisons of immigrant wages to their native peers using data the Program for the International Assessment of Adult Competencies (PIAAC) reveal within country immigrant wage gaps in these two countries with immigrants making, on average, over $200 less per month than their native peers. This study uses PIAAC to examine potential explanations for these immigrant wage gaps using an additive path analysis approach that allows us to match populations by occupational field and segment out the direct effect of immigrant status on wage from the indirect effect of immigrant status on wage through education and literacy and numeracy skills. Results suggest that factors attributing to the immigrant wage gap differ by country. In the U.S. immigrants are disproportionately concentrated in low wage jobs. Wage gaps disappear, however, once immigrants and natives in the U.S. are matched by occupational field. The strong link between education and wage in the U.S., combined with the immigrant educational attainment gap present in the country, suggests that to reduce the within country wage gap policies should be adopted that (a) aid persistence in education by supporting the transition of immigrants into the American education system, and (b) train educators to properly support learners that are culturally and linguistically diverse. The initial wage gap in Canada remains present in nearly all occupational fields suggesting that immigrants in Canada that work in the same field and have equivalent education and literacy and numeracy skills as their native peers earn significantly less money, controlling for key demographic variables. We conclude that in Canada, the wage gap results from underemployment, marginal returns on education and discriminatory wage practices. These findings suggest that the point-based immigrant policy in Canada is successful in attracting highly educated immigrants but may fail to properly support them once they arrive in-country.
Labor Market Experiences of Canadian Immigrants with Focus on Foreign Education and Experience
International Migration Review, 2009
Recent Canadian immigrants have increasing education levels but decreasing earnings, partly due to the devaluation of foreign education and work experience. This study uses 2002 Ethnic Diversity Survey data and examines the value attributed to foreign education for immigrants based on their duration of stay in Canada, which proves to be an important methodological distinction. Immigrants from developing countries experience the most acute devaluation. The findings outline the limitations of human capital theory in explaining the labor market experience of Canadian immigrants and have implications for the current “point system” used to select immigrants to Canada.
2008
Dans cet article, nous examinons la question de la surqualification des immigrants sur Ie marche du travail au Canada. Nous utilisons des donnees de 1999 tirees de I'Enquete sur Ie milieu de travail et les employes pour analyser les determinants de la surqualification et ses effets sur les revenus de travail. On trouve, dans la litterature actuelle, de nombreuses etudes sur les effets de la surqualification ; toutefois, celle-ci presente la premiere evaluation du rendement de I 'education au Canada realisee sur la base du nombre d'annees de scolarite necessaires pour repondre aux exigences reliees a un emploi, telles que celles-ci sont per~ues par les travailleurs. On observe que, en comparaison avec les travailleurs nes au Canada, les immigrants recents sont beaucoup plus touches par la surqualification, et que, pour eux, Ie rendement que devrait procurer un plus haut degre de scolarite est relativement faible. Ce phenomene semble expliquer une part importante de I'ecart qui existe entre les salaires des immigrants recents et ceux des travailleurs nes au Canada. Mots ch!s : surqualification, immigrants, revenus de travail, rendement de I'education, immigration This paper addresses the overeducation of recent immigrants in the Canadian labour market. Data from the 1999 Workplace and Employee Survey are used to explore the determinants and earnings consequences of overeducation. Although a well-developed body of literature examines the earnings consequences of overeducation, this paper presents the first Canadian estimates of returns to years of schooling that are contingent upon perceived job requirements. Compared with Canadian-born workers, recent immigrants are found to have a relatively high incidence of overeducation and to earn relatively low returns for surplus schooling. These are shown to be major contributors to the earnings gap between recent immigrants and workers born in Canada.
2010
Resume: An aging population and declining birth rates have raised concerns among Canadian policymakers over the future availability of skilled workers in Canada. Regional labour market impacts of this change in the demographic composition of the population have also been affected by the out-migration of population from smaller provinces and rural areas. At provincial and local levels, immigration is increasingly viewed as a tool to address these issues. While attracting skilled immigrants is the main focus of recent regional immigrant policy initiatives, lack of recognition of their credentials in Canadian labour markets is viewed as a significant barrier to their successful integration into the provincial and local Canadian labour force. This integration is necessary to obtain the desired economic outcomes of a wider geographic distribution of immigrants. As a result, federal and provincial governments, as well as nongovernmental organizations, are now investing resources to remove...
An explanation for the lower payoff to schooling for immigrants in the Canadian labour market
2009
This paper examines the difference between the payoffs to schooling for immigrants and the native born in Canada, using 2001 Census data. Analyses are presented for males and females. Comparisons are offered with findings for the US. The paper uses the Overeducation/Required education/Undereducation framework (Hartog, 2000) and a decomposition developed by Chiswick and Miller (2008). This decomposition links overeducation to the less-than-perfect international transferability of immigrants' human capital, and under-education to favourable selection in immigration. The results show that immigrants have a lower payoff to schooling because of the different effects under-education and over-education have on their earnings. The effects of under-education, or selection in immigration, are, however, twice as large as the effects of over-education, or limited international transferability of human capital. Favourable selection in immigration appears to be less important in Canada than in the US, where it predominates among the least educated.
Ethnic differences in educational attainment among the children of Canadian immigrants
Sandbox Journal for …, 2008
Using the 2002 Ethnic Diversity Survey, this article examines the ethnic differences in university education attainment among the children of immigrants in Canada. We found that most groups achieve clear upward mobility across generations, while such upward pattern is not observed among Blacks and Filipinos. Asians (with the exception of Filipinos) attain higher academic achievements than most groups of European origins even when accounting for group variations in family background, and social and ethnic capital. Parental education was important in explaining the relatively low university completion rates among the second generation Portuguese and Italians. Rural residence of the father's generation was an important factor for the second generation Dutch and German youth, reflecting the different settlement patterns of these various groups. Our findings suggest that race/ethnicity has become a salient factor in educational stratification.
Gender Variations in the Socioeconomic Attainment of Immigrants in Canada
Journal of Sociological Research, 2012
Using data from the 2001 Census of Canada, this study examines gender variations in the socioeconomic attainment of immigrants in Canada aged 30-40. Multivariate regression analysis was carried out to test the research hypotheses. In general, the study finds that male immigrants in Canada aged 30-40 in 2001 are likely to have higher educational attainment, higher occupational prestige and higher income attainment than female immigrants of the same age group, even after controlling for human capital variables. A similar gender differential pattern in socioeconomic attainment also prevails across various subgroups of immigrants based on marital status and region of birth. The study finds evidence in support of the theory of discrimination rather than the theory of human capital, and it explores the possible implications of these findings.
8. The Colour Of Money Redux: Immigrant/Ethnic Earnings Disparity In Canada, 1991–2006
The Housing and Economic Experiences of Immigrants in U.S. and Canadian Cities, 2015
In this paper, we investigate how visible minority and immigrant earnings gaps in Canada evolved over 1991 to 2006. Immigrant disparity changes with the duration of residence in Canada, so we evaluate disparity at 5 years in Canada, that is for relatively recent immigrants. We find that, overall, visible minority-and immigrant-based earnings disparity increased substantially over the 15 year period. This pattern is observed broadly for both men and women, in Canada as a whole and in each of its three largest CMAs, for most white and visible minority immigrant groups, and for most Canadian-born visible minority ethnic groups. The decline in relative earnings is large: it is on the order of 20 percentage points for both white and visible minority immigrants and on the order of 10 percentage points for Canadian-born visible minority workers.