ARCHIVED – Social Capital and Wages - Outcome of Recent Immigrants to Canada

3. Data and Methodology

3.1 Data

The Longitudinal Survey of Immigrants to Canada (LSIC) is a survey designed to study how newly arrived immigrants adjust to living in Canada during their first four years. Information provided from the LSIC expands upon datasets currently available to assess integration experiences, such as the Census, the Longitudinal Immigration Data Base (IMDB) and the Ethnic Diversity Survey (EDS), by providing longitudinal information, identifying immigration category, and by capturing information that moves beyond the economic aspects to include the social and cultural aspects of integration – information critical to understanding the determinants of immigrant integration outcomes.

The LSIC is a “longitudinal” survey – that is, the same respondents were interviewed repeatedly over time. For the LSIC, interviews took place at six months, two years and four years after arrival in Canada. By interviewing the same people over time, the LSIC provides a dynamic picture of the experiences of these recent immigrants, rather than a static “snapshot”.

To participate in the LSIC immigrants must have: arrived in Canada between October 2000 and September 2001; been 15 years of age or over at the time of landing; and landed from abroad. There was only one participant per family unit.[Note 2] The interviews were conducted by Statistics Canada, with the first wave taking place between April 2001 and May 2002, the second between December 2002 and December 2003, and the third between December 2004 and December 2005. Twelve thousand immigrants were interviewed in Wave 1, while 9,300 and 7,700 of them participated in Waves 2 and 3 respectively.

The survey covers a variety of topics including demographic characteristics of the longitudinal respondents,[Note 3] Citizenship, Social Interactions, Group Organizations, Language Skills, Housing, Education, Employment, Health, Values and Attitudes, Income, and Perceptions of Settlement.

Based on the network-based concept using information that is unique to the LSIC data, with focus on the Social Interactions and Group Organizations modules, indicators of social capital were constructed in different dimensions: size, density, and diversity for various types of social capital for each wave (Xue 2007).[Note 4] In addition, benefiting from the information in the LSIC on the actual channels through which immigrants found jobs, it is possible to identify which connections lead to specific jobs so that indicators of job-found channels were created: through family members or relatives, through co-ethnic friends, through non co-ethnic friends or through formal channels.[Note 5]

Based on the indicators, the individual stock of social capital and job-found channels is used along with other socioeconomic variables to model the log of the real weekly wages conditional on employment in the first six months, two years and four years in Canada in panel data models.

The sample is restricted to individuals who participated in all three interviews who were employed and paid at the time of a specific interview. Immigrants who were self-employed and those who were employed without pay are excluded from the analysis. Furthermore, the immigrants who resided in the Territories are excluded from the analyses due to the extremely small size of this group. In addition, individuals for whom information concerning the included variables was missing are excluded. In order to capture the gender differences in the predictors and wage outcomes, the sample is separated into male and female immigrants for regression analyses.

3.2 Methods

All analyses are longitudinal, taking advantage of this characteristic of the LSIC. The relationships between social capital indicators and weekly wages are examined with panel data models, including fixed and random effects models in order to capture the unobserved individual heterogeneity. The Hausman-Taylor (HT) models and panel instrumental variable (IV) models are also used to further address the endogeneity on the returns to social capital. Ethnic concentration ratios in the Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs), where the longitudinal respondents (LRs) lived are derived from 2001 Census, are included in the IV models as external instrumental variables.[Note 6]

Hausman model specification tests are conducted under different assumptions about endogeneity of social capital, the results of which suggest that the HT estimators are consistent and efficient and favoured over other panel data model estimates, including IV ones. Thus the interaction effects are further explored based on the HT estimators.

Notes

2 See “Statistics Canada (2007), Longitudinal Survey of Immigrants to Canada, Wave 3 – Microdata User Guide” for sample selection and survey design.

3 The Longitudinal Respondent (LR) entity includes LR characteristics such as age, sex, religion, ethnicity and countries where the LR resided for more than six months. In addition to data collected in the survey, this entity also contains some basic pre-landing information gathered from a Citizenship and Immigration Canada administrative database such as, class of immigrant and special program under which immigrant came in Canada.

4 Details on construction of social capital indicators are illustrated in Xue (2007).

5 For each individual, the job-found channel is determined by the channels through which the current main job was found.

6 The ethnic concentration ratios in CMA/CAs are derived from 2001 Census 20% sample data.

Page details

Date modified: