Source Countries of Immigrants Make Big Difference In Future Success

Recent Immigrants from Lower-income Countries Are Doing Much Worse

Global Economics
Patrick Grady, Canadian Economist

The aggregate data from the 2006 Census confirmed that the deterioration of the performance of …immigrants, who arrived since 1990 (following the big increase in the number of immigrants admitted after 1987) is ongoing (Statistics Canada, 2008,pp.21-25). But it provided no information on how immigrants from different countries and regions are doing relative to each other. This is a major information gap as such information provides important information on how well Canadian immigration policy is doing in selecting the immigrants most likely to succeed in Canada.

Fortunately, however, more disaggregated data on the economic performance of immigrants was made recently available to researchers in the form of the 2006 Census Public Use Microdata File (PUMF). It contains 844,476 records, presenting much relevant census data for individuals representing a sample of  2.7 per cent of the Canadian population. This includes data on the employment income earned by immigrants and much useful information on their characteristics and origins. The downside is that the information is only available to those who are able to manipulate large data bases using sophisticated data base systems.

This note seeks to fill the information gap by packaging and presenting the data for 2005 on the employment income earned by recent immigrants based on their countries or regions. For the purposes of this note, recent immigrants are defined as those arriving since 1990 and up to 2004. Employment income as defined by Statistics Canada in the Census 2006 Public Use Micro-File “refers to total income received by persons 15 years of age and over during calendar year 2005 as wages and salaries, net income from a non-farm unincorporated business and/or professional practice, and/or net farm self-employment income.”(Statistics Canada, 2009, p.75).

The Census data provided in Table 1 (See ) reveals that these recent immigrants only earned an average of $25,714 in 2005 with immigrants in Canada longer doing better than the most recently arrived. Nevertheless, it is still striking that, on average, recent immigrants only earned 69.1 per cent of the $37,213 earned on average by non-immigrants in the same year.

The countries and regions shown in Table 1 are ranked from the highest to lowest on the basis of the employment income earned by its emigrants using Place of Birth information from the Census as a proxy for country or region of origin. This table highlights the starkly different performance with income running from highs of $49,293 for those coming from the United Kingdom and $45,144 for the United States, to lows of $20,198 for Pakistan, $20,033 for West Central Asia and the Middle East, and $15,245 for Other Eastern Asia.

Only recent immigrants from the United Kingdom, the United States, and Other Northern and Western Europe earned more than non-immigrants. Recent immigrants from a long list of countries and regions including India, South America, Northern Africa, Eastern Africa, Central America, Other Caribbean and Bermuda, Other Southeast Asia, Other Southern Asia, the People’s Republic of China, Pakistan, West Central Asia and the Middle East, Other Eastern Asia, all in descending order, do worse than the average of all recent immigrants with those immigrants coming from Other Eastern Asia only earning 41 per cent of non-immigrants.

Some of the differences in the employment income of recent immigrants among countries and regions can probably be explained by the different composition of immigrants. Other studies have shown in the past that refugee class immigrants earn much less than other immigrants and that family class earn less than economic class. Unfortunately, the 2006 Census does not contain any data on the class of immigrants that can be used to shed additional light on the difference in employment income among countries and regions.

The data from the 2006 Census is examined in more detail in a longer paper, which seeks to explore the underlying causes of the poor performance of recent immigrants in the labour market using econometric techniques.