Atlantic Research Group on Economics of Immigration, Aging and Diversity

Earnings, Employment and Age differentials between Immigrant and Native-born Workers by Occupations

Wimal Rankaduwa and Azad Haider

University of Prince Edward Island & Saint Mary’s University

Differences in the economic performance of immigrant and native-born workers in Canadian labour markets have been the subject of study of academic researchers and of concern to policymakers. The overall differences in earnings, employment, and the demographic characteristics such as age have been the main variables of analysis in examining these differences. However, these analyses have mostly ignored the variations in economic performance of immigrants, relative to native-born, that may occur according to the occupations in which they work. We believe it is important to do so because a large number of immigrants in Canada are selected to meet the labour market requirements in specific occupations. Hence, in this article, we briefly examine the distribution of those differences based on the national averages calculated for ten broadly defined occupations. We base our calculations on census 2001 and 2006 data disaggregated by those census divisions for which complete data were available. Our observations, based on the averages of earnings, employment, and age calculated at census division level for ten occupations are described below. All data pertain to the year prior to each census (i.e., 2000 and 2005).

We understand that the data we have analyzed are more than ten years old. However, due to the differences in the way data were collected for the 2011 National Household Survey, we refrain from drawing a comparison with 2011 data. In fact, most of the recent labour market studies in Canadian immigration literature are based on census data prior to 2011.

Earnings

Figure 1 below shows the average annual earning ratios which represent the wages of immigrant workers relative to native-born workers across the ten categories of occupations.

Source: Authors’ calculations based on Census 2001 and 2006 tabulations provided by Statistics Canada.  A value exceeding 1 means immigrants earned more than native-born in a given occupation. A value below 1 means the opposite.

In both years, immigrant workers in health occupations earned about 30% more than native-born workers. In 2006, immigrants in natural sciences, sales, and social sciences occupations also earned slightly higher. However, in general, immigrant workers in majority of occupations earned less than native-born workers. Relative earnings of immigrant workers decreased in all occupations except in health and social sciences which showed slight increases over the five year period. 

In 2006, relatively larger negative earnings differentials for immigrant workers are found in the categories of primary industry (32%), management (27%), Arts (13%), Business (10%) and manufacturing (8%) occupations.  Natural sciences and sales occupations had relatively smaller differentials, 3% and 4% respectively.  The positive differentials in health were 23% and 24% in 2001 and 2006, respectively. The only other occupation  which showed a positive differential in 2006 was social sciences (1%). In general, overall earnings differentials widened between 2001, and 2006.

Employment

The employment of immigrant workers in terms of their numbers relative to the number of native-born workers are given by the employment ratios presented in Figure 2. Their employment in terms of the number of hours worked relative to the number of hours worked by native-born workers are shown by calculating the hours worked ratio in Figure 3.

Source: Authors’ calculations based on Census 2001 and 2006 tabulations provided by Statistics Canada.  A value exceeding 1 means more immigrants were employed in a given occupation. A value below 1 means the opposite.

In 2001, the composition of immigrants in labour force varied from 8 percent in business occupations to 20 percent in manufacturing occupations. In 2006, their composition varied from 9 percent in business to 22 percent in manufacturing.

In most occupations, the employment of immigrant workers accounted for less than 15 percent of the employment of native-born workers. In both census years, the  business (more than 90%) and manufacturing (over 75%) occupations recorded the highest and lowest differentials, respectively. All occupations, except manufacturing and natural sciences, reported differentials exceeding 85 % in both census years.

Source: Authors’ calculations based on Census 2001 and 2006 tabulations provided by Statistics Canada. A value exceeding 1 means immigrants worked more hours than native-born in a given occupation. A value below 1 means the opposite.

In terms of the hours of work, immigrant workers worked more hours in 2006, than did native-born, in all occupations except in health, manufacturing and social science occupations. The proportions of immigrant and native-born workers in manufacturing and social science related occupations did not change between the two census years. 

The hours of work ratio for immigrant workers relative to native born workers varied from 0.98 (in business) to 1.1 (in sales), in 2001. In other words, in business occupations, immigrant workers worked 2 percent fewer hours than native-born, during the week in which census was conducted in 2001. In 2006, the hours ratio varied from 0.93 (in health) to 1.1 (in sales. Immigrant workers in all occupations except health and social sciences worked more hours  in 2006. 

Age

On average, the immigrant workers were older than the native born workers in 2001 in all occupations. In 2006, the immigrant workers in four  occupations were younger than the native born workers. These occupations included  business, health, natural sciences and trade related occupations. It seems that there has been a slight tendency to employ younger immigrant workers over time in a majority of occupations. This is evident from the age differentials by occupational categories displayed in the table below. Relatively higher age differentials were found in the arts (above 20%), sales (about 20%) and in primary industry (above 15%) related occupations.

Source: Authors’ calculations based on Census 2001 and 2006 tabulations provided by Statistics Canada.  A value exceeding 1 means immigrants were aged more than native-born. A value below 1 means the opposite.

Conclusions

The 2001 and 2006 census data are the most commonly used data in recent studies that analyze labour market performance of immigrants relative to native-born. However, there is a dearth of studies analyzing these data by occupations.  Data based on the two censuses indicate that, in general, immigrant workers in a majority of occupations have earned less earnings than  native-born. The relative earnings of immigrant workers have decreased in all occupations except in health and social sciences which showed slight increases.

In most occupations, the employment of immigrant workers accounts only for less than 15 % of the employment of native-born workers. On average, the number of hours worked by immigrant workers exceeded that of native-born workers in all occupations, except business and natural sciences in 2001 and health in 2006.

Even though the employment differentials are substantial, those immigrant workers who found work in general have worked more  hours than  native-born workers. Yet their annual earnings fell below the annual earnings of native-born workers in most occupations 

On average in all occupations, immigrant workers were older than the native- born workers in 2001. This has slightly changed in 2006 as there has been a slight tendency to employ younger immigrant workers over time in a majority of occupations. When 2016 census data are available, we will be able to analyze if the immigration policy changes over the past ten years have had any effect on the above results.

Our simple analysis in this article has highlighted the importance of studying immigrants’ economic performance by considering the jobs they do in Canada. A more complete analysis will involve estimating a multivariate regression model to study earnings and employment of immigrants and native-born Canadians. We leave this analysis to be conducted by future researchers in the field.