The Economic Outcomes of Canadian Immigration:  Summary

"Beyond the Polemics: The Economic Outcomes of Canadian Immigration" examines the characteristics and labour market outcomes of Skilled Workers who entered Canada between 1986 and 2001, prior to the introduction of the current points system in the Immigration and Refugee Protection Act.  The paper suggests that there is a link between selection and economic outcomes and concludes that immigrants selected under a points system (particularly one that emphasizes language facility) will not only do better than other immigrants, but their earnings will quite quickly "catch-up" with those of the Canadian-born, even when they enter under tough economic conditions. 

The author, Daniel Hiebert, notes that "Research conducted on the labour market participation and earnings of recent immigrants shows, conclusively, that Principal Applicants of the Skilled Workers category obtain jobs, and achieve incomes that are equivalent to the average of all Canadians, very quickly."  Of those who arrived in the 1990s, the "catch-up" time for Skilled Worker Principal Applicants was just 3 years.  The paper suggests that while the economic fortunes of immigrants have, overall, declined, the story is much more complex; some immigrants -- notably Skilled Worker Principal Applicants -- are experiencing relative economic success.  However, their success is largely concealed when research does not take the differences among the various immigration classes into account; gender variation is similarly concealed.

Finally, the paper suggests that language facility and Canadian experience are important to the economic outcomes of immigrants.  With respect to language facility, the author notes that his preliminary findings suggest a higher correlation between language facility and earnings then between education and earnings, although he notes that these data should be further examined.  Nonetheless, he does conclude that language capability appears to be particularly important to the economic outcomes of Skilled Worker Principal Applicants.  He also suggests that "while returns to foreign experience and education have declined in the past two decades, returns to Canadian experience have increased."  Policy changes that allow immigrants to acquire Canadian experience (or that reward those who already have some) may thus further increase the economic success of Skilled Worker Principal Applicants.

For a full version of this Metropolis working paper, visit: http://www.mbc.metropolis.net/Virtual%20Library/2006/WP06-15.pdf.