IMDB 2008 Core Report – National Portrait of Immigrant Outcomes: 2001-2008 Employment Earnings

Executive summary

This report is a follow-up to previous reports on immigrants’ labour market outcomes and is the central report of Research and Evaluation’s Longitudinal Immigrant Database (IMDB) 2008 Research Series describing immigrant outcomes. Other reports in the series include the Provincial Portrait and the IMDB 2008 Immigration Category Profiles describing outcomes by immigration category.

Previous reports examined labour market outcomes of immigrants up to the 2005 tax year and the 2004 landing cohort.Footnote 1 This report updates the previous analyses for the 2006-2008 tax years and the 2005-2007 landing cohorts. As in the previous reports, the focus is on the incidence of employment earnings, average entry employment earnings (before income taxes), and growth of average employment earnings during immigrants’ first five years in Canada for landing cohorts 2000 to 2007 and tax years 2001 to 2008. Many of the charts and tables, however, provide data back to 1981. The primary data source is the IMDB. Other datasets, such as the Research Data Mart (RDM) and special tabulations from the Canada Revenue Agency (CRA) are also used. Data related to the tables and charts in this report can be found in the appendix. More information about the data sources, a glossary of terms and concepts, and additional notes is available in the IMDB 2008 Research Series – Technical Notes (Appendix B).

This report examines outcomes by immigration category, with a special focus on skilled worker principal applicants (SWPAs) including their gender, age at immigration and occupational group, and provides information about other immigration classes by way of comparison. Due to this report’s reliance on the IMDB, which uses taxation records, this report only includes those aged 15 years and over who file an income tax return.

Between 2001 and 2008, labour market outcomes as measured by average employment earnings improved somewhat for the average Canadian (from $38,122 to $41,068 or 7.7%). But, within this overall picture there were significant differences among groups.

If we examine the last four years of this period (2005-2008), we see that although considerably lower than average Canadian employment earnings, average entry employment earnings for all immigrants (one year after landing) increased from $20,543 for the 2004 cohort to $23,862 for the 2007 cohort, an increase of $3,319 (16%) compared to an increase of $1,793 (4.5%) for all Canadians for the same period (see Table 8 in the appendix for more information). This trend resulted in the proportion of immigrant entry employment earnings rising relative to the average Canadian employment earnings from 51% in 2005 to 58% in 2008. The narrower gap was mainly due to steady increases in entry employment earnings of SWPAs and provincial nominee principal applicants (PNPAs). Since 2002, PNPAs had the highest average entry employment earnings of all immigrant categories, followed by SWPAs, with differences between the two ranging from $7,000 to $12,000.

Between 2005 and 2008, SWPAs average entry employment earnings increased from $27,801 to $33,839, an increase of $6,038 (22%). Although still below the Canadian average, the increase in average entry employment earnings meant an increase in the proportion of SWPAs average entry employment earnings relative to the Canadian average from 71% to 82% over this period. PNPAs also saw an increase of $2,573(6%)—from $40,144 in 2005 to $42, 717 in 2008. Their average entry employment earnings are very close to or above the Canadian average.

Between 2001 and 2008, PNPAs had the highest incidence of entry employment earnings of the five immigration categories analysed in this report: about 90%, above the SWPAs’ average of 80% and well above the 69% average for all immigrants and the Canadian average of 67% (in 2008).

Although PNPAs ranked first in terms of entry employment earnings, their average employment earnings growth was significantly slower than SWPAs—for instance PNPAs recorded average employment earnings growth of roughly 9% and 8% in the second and third year after landing while the comparable figures for SWPAs were 20% and 15% for 2001 to 2005 landing cohorts. After 2002, while the average employment earnings of SWPAs surpass the average Canadian employment earnings within four years of landing, PNPAs do it within the first year. In contrast, the average employment earnings of all immigrants do not reach the Canadian average within their 16 years in the database, although more recent cohorts (2001-2005) have posted growth averaging roughly 17% and 12% in the second and third years after landing.

Between 2000 and 2007, the SWPA share of all immigrants with entry employment earnings declined from 36.9% for cohorts landing in 2000 to 24.2% for the 2007 landing cohort, while the PNPA share rose from 0.4% to 4.8% over the same period. This change in distribution of the two highest earning immigrant categories may also have had an impact on the overall immigrant earnings.

With regard to SWPAs, the gender differential in average entry employment earnings for SWPAs ned between 2001 and 2008. In terms of age, older SWPAs tended to have higher average entry employment earnings since 2003.

Outcomes for the other immigrant classes such as family class immigrants, refugees, and economic spouses and dependants (economic S&D) were quite different. These classes had much lower incidences of entry employment and average employment earnings, consistent with the different motivations for immigrating of these immigrant groups and other factors relating to their human and social capital as well as the length of time usually required for them to find employment. Although their average employment earnings also grew in the years after landing (albeit at a slower pace than the two groups mentioned above), average entry employment earnings remained rather flat over the period.

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