Immigrant levels in Canada and immigrant entry earnings
Recent research shows that increased immigrant levels in Canada are
associated with a decline in immigrant entry earnings.
In a 2014 paper published in Canadian Public Policy, Feng
Hou and Garnett Picot analyzed data from the Longitudinal Immigration
Database for 1982-2010.
They examined whether levels of immigration affect annual
earnings of immigrants during their first two years in Canada, when
controlling for macroeconomic conditions like unemployment rate and
individual variables such as language ability.
Data showed that the larger an immigrant cohort, the lower the
entry wages for members of that cohort. For instance, for immigrant
men, a 10% increase in immigration level results in a 0.8% decline
in their entry earnings. For immigrant women, this same increase
leads to a 0.3% earnings decline. This result was generally
consistent for immigrants of all education levels.
Hou’s and Picot’s results suggest that the large increase in
immigration levels in Canada over the last thirty years has resulted
in a roughly 9% decrease in average entry earnings of immigrant men,
and a 3% decline in earnings for immigrant women.
typically have little or no Canadian work experience and may have
language and cultural issues affecting their job search. Since they
are not perfect substitutes for domestic workers, they tend to
compete with each other for work. An increase in immigration levels
thus elevates competition and places downward pressure on their
However, the effect of immigration level on earnings was
weaker for immigrants with very high earnings. Hou and Picot suggest
that this reflects the possibility that highly paid immigrants are
less likely to compete with other immigrants arriving in the same
Since the 1980s there has been long-term decline in the
entry earnings of immigrants to Canada. Reversing this decline has
been a primary goal of Canada’s immigration policy over the past two
decades. The government has focused on altering the characteristics
of immigrants, including changing distribution by class, education,
language skills, and occupation. Hou and Picot’s study suggests that
immigration level is another factor that can influence entry
A summary of the study can be found at the Population Change and
Lifecourse Cluster Policy Brief:
Annual Levels of Immigration and Immigrant Entry Earnings in Canada.
For further information, please contact Feng Hou, Statistics Canada.