Earning disparities between immigrants and native-born Canadians

The economic contribution of immigrants is often measured by their earnings in that the closer they are to the earnings of native-born Canadians and the more quickly immigrants can bridge the income gap, the more immigrants are assumed to be endowed with human capital. Using microdata of the 1996 census, this paper compares immigrant groups with native-born Canadians of the same gender and racial origin at four levels of Census Metropolitan Area defined by population size. The findings indicate that immigrants of the same gender and racial origin earned either the same or more than their native-born counterparts. However, when variations in human capital, experience, and other individual differences in work-related characteristics and immigrant experience are taken into account, along with differences in urban scale, immigrant population size and unemployment rate, all immigrant groups earned less than their native-born counterparts. The magnitude of net earning disparities between immigrants and native-born Canadians varies, depending on gender, racial origin and less so on CMA level. The study suggests that many factors, including unequal opportunities, affect the earnings of immigrants, and that the assumption of immigrants' inferior human capital content inferred from earning disparities is tenuous at best.