ARCHIVED – Social Capital and Employment Entry of Recent Immigrants to Canada
This study suggests that social capital does have impacts on the immigrants' labour market outcomes, for both males and females. Social capital affects female newcomers’ employment entry to a greater degree than males. The following empirical findings are robust across statistical specifications.
First, the attachment to the labour market for female immigrants is more related to social networks than for males. Female immigrants' employment probability tends to be associated with all the elements of social network structure: size, diversity and density, while the frequency of contact with the networks seems to have no significant effects on the employment status for male immigrants.
Second, the role played by different types of social networks on employment was examined. The study confirms some of the findings in the literature on social networks, such as the effects of weak ties (organizational network vs. friendship and kinship networks) and network diversity. Specifically, the analysis suggests that friendship network is the most important relationship in the labour market entry outcomes. However, there is no evidence suggesting any effects from the relatively distant relationships--- groups or organizational networks--- on employment status. Furthermore, the geographic closeness of friendship shows a positive effect on female immigrants’ employment likelihood. Nonetheless, given the short period that the analysis covers relative to the long integration process, the results tend to suggest that in the initial years in Canada, weak ties end up with few impacts on improving immigrants’ employment probability.
The directions of the relationships between social capital indicators and labour market outcomes are mixed. While a more diversified network is associated with higher employment probability, the absolute number of sources meeting friends has a small but negative impact on employment likelihood. On the one hand, these findings further emphasize the importance of diverse networks on immigrants’ employment outcomes, which is consistent with the findings of Borjas (1995) and Warman (2005) that high co-ethnic levels of social capital among immigrant groups negatively affect their labour market outcomes. On the other hand, unlike the Australian evidence (Stone, Gray and Hughes, 2003) of positive effects of network size, the results here indicate a negative impact of friendship size. However, given the measurement disparity between the analyses,11 this result should be interpreted with caution.
Finally, while an ethnic diversified friendship increases the probability of employment for both male and female immigrants, ethnic diversity of the network seems to have a differential impact on the employment likelihood across ethnic groups and immigration categories. In particular, making the friendship network more ethnically diverse is much more beneficial to the immigrants landed in the immigration categories other than the family class, especially male skilled workers, female economic class and female Filipino immigrants.
Some results confirm the implications of Calvó-Armengol and Jackson’s theoretical model (Calvó-Armengol and Jackson 2004). While employment likelihood increases with network diversity for both genders, the effect of ethnic diversity decreases over time for male immigrants. This result, echoing with the finding that friendship network size has a negative impact on employment during the initial four years, reinforces the possible competition within the same ethnic group of immigrants and the negative effect of network size in the short run implied by Calvó-Armengol and Jackson.
Overall, the analysis reveals significant variability in the presence of social networks at landing and in the social capital stock across immigration classes and ethnic groups; furthermore, social capital stock as measured by various indicators influences immigrants’ probability of employment in the Canadian labour market in the initial four years in Canada. In addition, possibly through a more diverse network, social capital plays an important role in facilitating the economic assimilation of recent immigrants in terms of a higher probability of getting employment. However, due to data limitation, this study focuses only on the relatively short period of the first four years after landing. Further research will be required to improve our understanding of the role of social capital in newcomers’ employment entry process over a longer time span.
Employment entry is the first step leading to a successful integration in the Canadian labour market for immigrants. The research on the economic return to social capital will further provide evidence on other labour market outcomes for immigrants, namely, employment earnings and occupational outcomes.
11. Note that in the analysis, the size of friendship is measured by the number of sources meeting new friends according to the data structure of the LSIC, while in Stone, Gray & Hughes’ research, the size of network is measured by the absolute number of friends.
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