Newcomers are having better outcomes in the Canadian labour market, in some cases, they are performing better than workers born in Canada. New immigrants are better educated and on the average younger than Canadian-born workers in the labor market, according to a recent reports titled, “The Improved Labour Market Performance of New Immigrants to Canada, 2006-2019“.
Economist Kimberly Wong compared the participation rates, unemployment rate, employment rates and hourly wages of three cohorts: very recent newcomers who had been in Canada for less than five (5) years; recent immigrants who had five (5) to Ten (10) years in the country; and Canadian-born workers.
The data was fetched from the Statistics Canada Labour Force Study between 2006 and 2019 and released by the Centre for the Study of Living Standard.
Though immigrants had a higher employment rate and participation rate, there was still wage gaps and higher unemployment rates.
Immigrants had higher participation rates and employment rates than Canadian-born citizens by the end of the 13 year period.
By 2019 immigrant participation rates exceeded the Canadian-born by 4.5 per cent points for very recent immigrants and 10.0 per cent points for recent immigrants. The employment rates of very most recent immigrants surpassed the rate of Canadian-born citizens by 1.5 per cent points and recent immigrants exceeded them by 8.7 percentage points.
Unemployment rates dropped for immigrants, but they were still higher than Canadian-born. By 2019 the unemployment rate of both very recent and recent immigrants was greater than the rate of the Canadian-born workers by 4.0 and 1.0 per cent points, respectively.
Wages adjusted for the cost of living for most recent immigrants increased, but they were still earning between $2.87 and $4.32 dollars per hour less than the Canadian born citizens.
Reasons Why Immigrant Outcomes Have Improved?
The report suggests six strong reasons for the general improvement in the labour market performance of newcomers:
- more new immigrants are holders of university degrees;
- the strong labour market of the late 2010s may have benefitted newcomers more than Canadian-born citizens;
- federal and provincial programs targetted at immigrant workers, such as the Provincial Nominee Programs (PNPs), likely helped labor performance;
- support services may have enhanced integration into the labor market; and
- foreign credential recognition could have improved performance
- Improved labour market data may have better-helped newcomers prepare for the Canadian job market
Room for improvement
There were also two explanations for the slower gains in relative wages compared to other labor market indicators:
- challenges faced by immigrants in Canada such as language barriers, discrimination, and smaller social networks may have impacted earnings more than employment; and
- Conflicting jobs, where university-educated immigrants work in a job that is unrelated to their field of studies, which did not improve, which could be the reason why the relative wages of highly-educated immigrants did not improve.
“Given their lower average age and higher education relative to the Canadian born citizen working-age population, newcomers represent an important advantage to the Canadian economy, from the perspective of their contribution to the labor force and to tax revenues,” the report said. “This contribution could be even increase if the gaps in unemployment rates and relative wages were cut down further.”