Abstract
Despite growing interest in the regionalization of immigration, comparative studies of the labor market outcomes of immigrants in traditional and non-traditional destinations remain limited in Canada. Using Atlantic Canada as a non-traditional destination and drawing data from the 2006 Census of Population, this study compares the determinants of immigrant earnings in this region with those of three major traditional destinations, Montreal, Toronto, and Vancouver (MTV). Results indicate the returns to postgraduate degrees and foreign credentials on earnings are higher in Atlantic Canada than MTV, although the costs of being visible minorities and speaking non-official language(s) at home are not statistically different between the two destinations. Results also show the earning disparities linked to employment in ethnic businesses are smaller in Atlantic Canada. This paper discusses implications of these findings for immigrant settlement policy.
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Introduction
While immigrants in Canada are considered crucial to the nation’s general economic development, ethnocultural diversity, and population growth, their contributions have been concentrated in three traditional destinations: Montreal, Toronto, and Vancouver (MTV). Tellingly, more than 60% of all immigrants arriving between 2006 and 2011 settled in these gateway cities (Statistics Canada 2011). Both the federal and the provincial governments have acknowledged this unequal immigrant distribution across Canada (Hyndman et al. 2006; Krahn et al. 2005). On the federal side, in 2006, Minister of Citizenship and Immigration Monte Solberg recommended incoming immigrants settle in non-traditional destinations where jobs would be more readily available to them (Haan 2008). On the provincial side, a number of governments have actively participated in Provincial Nominee Programs (PNPs) to recruit immigrants to non-traditional destinations and bolster the local and regional economies (Seidle 2013).
Despite political interest in increasing the regionalization of immigration, studies comparing the economic performance of immigrants in traditional and non-traditional destinations remain limited in Canada (exceptions—Fong et al. 2015; Haan 2010; Yoshida and Ramos 2013). To better recruit and retain immigrants in non-traditional destinations, it is essential to understand the determinants of immigrant economic performance in those locations. How do they differ from traditional receiving areas? For one thing, the labor markets may differ; immigrants to non-traditional destinations may be required to have different skill sets and more specialized knowledge to successfully integrate into mainstream labor markets than those headed for traditional ones (Akbari 2015). Moreover, while PNPs have been implemented in non-traditional destinations, their effectiveness is questionable. Although nominated immigrants have generally reported higher earnings than their non-nominee counterparts, the retention rates of nominees in their first provinces of settlement differ little from those of non-nominees, except in Manitoba (Pandey and Townsend 2010).
This study compares the earnings of immigrants in Atlantic Canada (i.e., Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador) to that in MTV. Although Atlantic Canada has historically attracted fewer immigrants than other regions, the percentage has increased in recent years (Statistics Canada 2011). A focus on Atlantic Canada as a non-traditional destination is important, as this region faces two important demographic challenges related to the recruitment and retention of immigrants. For one, among all Canadian regions, it has the highest percentage of seniors, reflective of the region’s declining birth rates and net out-migration (Akbari 2014). For another, the region is known for its low immigrant retention rates; about 30% of recent arrivals eventually have relocated elsewhere (Yoshida and Ramos 2013). To address these demographic concerns, some provincial and municipal governments have implemented immigrant integration policies aiming to increase and retain newcomers (Akbari 2011). However, since Atlantic Canada has only recently attracted scholarly interest as an immigrant destination, little is known as to whether immigrants in this region fare differently than those in traditional regions, notably MTV.
This study will contribute to the growing research on new immigrant destinations by offering empirical evidence from Canada. Undeniably, Canada is one of the major immigrant destination countries in the Global North, yet scholarly contribution to this emerging literature is minimal to date (Winders 2014). To this end, using data from the 2006 Census of Population, we compare the impacts of human capital, racial discrimination, credentialism, and employment in ethnic businesses on the earnings of immigrants in Atlantic Canada compared to MTV.
Literature Review
Human capital theory is often applied to research on immigrant economic performance (Frank et al. 2013). This theory suggests a person’s earnings may vary by his/her education and job training (Becker 1968). Specifically, immigrants who invest in higher education are better equipped to attain useful skills relevant to the labor market and will enjoy higher earnings than their less educated counterparts (Buzdugan and Halli 2009). Similarly, immigrants proficient in the host country language tend to be more efficient in communication; this allows them to work more productively and to find jobs better suited to their skills (Boyd and Cao 2009; Chiswick and Miller 2003). Therefore, we hypothesize higher levels of education and host country language proficiency are associated with higher earnings for immigrants in both Atlantic Canada and MTV.
Despite frequent references to it in the immigration literature, human capital theory has been criticized for its failure to explain the labor market challenges faced by some immigrants with higher levels of human capital (Li 2000). Previous studies posit such earning disparities are related to three factors: credentialism, racial discrimination, and employment in ethnic businesses (Bauder 2003; Fong and Hou 2013; Li 2001). In the following sections, we review the literature on these three factors and discuss implications for the economic outcomes of immigrants in Atlantic Canada and MTV.
Foreign Educational Credentials in Atlantic Canada and MTV
Immigrants to Canada often face earning disadvantages because their human capital has lower returns due to under-/non-recognition of their foreign credentials (Reitz 2001). There are several possible explanations for this lack of recognition. First, employers in mainstream labor markets may act on personal prejudice and/or lack knowledge about overseas education systems, valuing foreign credentials less than Canadian ones. As a result, we may see lower returns to degrees and diplomas obtained outside Canada (Aydemir and Skuterud 2005; Boyd and Thomas 2001a).
Second, the devaluation of foreign credentials may be systemic, as the rules and procedures related to accreditation or certification often have double standards. Since accreditation requirements are based on Canadian education systems, the native-born, likely to have a Canadian education, are more advantaged in accessing skilled professions/occupations than their immigrant counterparts (Boyd and Thomas 2001b). Finally, in today’s job markets, employers can hire from a large pool of highly educated job candidates. The size of the native-born population with higher education has increased since the 1970s (Reitz 2001). This group is not only qualified; its members may also get preferential treatment. Employers may hire native-born university graduates over immigrant ones because of their unfamiliarity with and/or bias against the latter’s overseas education (Aydemir and Skuterud 2005; Basram and Zong 1998). Even though many immigrants are highly educated, those with international credentials tend to earn less than their Canadian-educated counterparts (Bauder 2003).
That being said, the economic performance of immigrants with foreign credentials may vary depending on whether they are employed in Atlantic Canada or MTV. For example, since the introduction of PNPs, the number of immigrants settling in Atlantic Canada has risen noticeably. PNPs were introduced in British Columbia, Manitoba, and Saskatchewan in 1998; Newfoundland and Labrador and New Brunswick followed suit a year later, with Prince Edward Island and Nova Scotia bringing up the rear after another 3 years. Unlike the immigrant recruitment process at the federal level, PNPs allow each province to welcome applicants with job skills suitable to local and regional economies. PNP applicants are usually required to secure at least one approved job offer from sponsoring employers in the respective province before arrival. Pandey and Townsend (2010) report that from 1999 to 2007, 15% of incoming immigrants in Newfoundland and Labrador and Nova Scotia, 30% in New Brunswick, and more than 50% in Prince Edward Island were admitted through PNPs. These percentages are much higher than in traditional destinations, such as British Columbia (1.9%) or Ontario (0.2%).Footnote 1 Since PNPs reflect specific regional economic needs, it is possible that immigrants to Atlantic Canada have skills and knowledge suitable for local economies, a circumstance that could facilitate their economic integration.
Further, there is a skill shortage in parts of the workforce, largely because the native-born in Atlantic Canada tend to have lower levels of education than elsewhere in Canada. Therefore, employers may be seeking certain skills in immigrants (Akbari 2014). For this reason alone, immigrants in Atlantic Canada may find jobs more easily than their MTV counterparts. These cities historically attract the bulk of native-born recent university graduates, along with the highly skilled immigrants, creating competitive labor markets (Picot and Sweetman 2005). This gives employers the luxury of choosing workers from a large pool of highly skilled job candidates (Haan 2008). Given Atlantic Canada’s smaller pool of qualified applicants, immigrants may experience less employment-related discrimination here than in MTV. In addition, employers hire immigrants based on the needs of the local economy and the labor markets are less competitive in Atlantic Canada. Given such differences in immigration policies and local workforce and labor markets, we hypothesize the cost of holding foreign credentials on earnings may be smaller for immigrants in Atlantic Canada than in MTV.
Racial Discrimination in Atlantic Canada and MTV
As suggested above, racial discrimination poses a potential barrier to the economic attainment of visible minority immigrants in Canada (Boyd and Vickers 2000). However, its impact is difficult to evaluate in quantitative research since most survey data do not provide direct measures of employers’ discriminatory attitudes toward visible minorities (Frank et al. 2013). As a result, after controlling for all the observable demographic and socioeconomic factors, studies treat remaining racial variations as the impact of racial discrimination (Li 2008; Pendakur and Pendakur 1998). While some studies indicate visible minority status negatively influences the earnings of immigrants (Anisef et al. 2003; Pendakur and Pendakur 2000), Yoshida and Smith (2005) find recent immigrants in Canada, regardless of visible minority status, do not encounter earning disadvantages if they have completed their education in Canada.
Research also indicates the existence of racial hierarchies within the labor markets in cities with large immigrant populations. For example, research finds employers in New York often consider white workers to have more skills than their non-white counterparts (Pager et al. 2009). In the Canadian context, visible minorities in MTV are more likely to experience job-related discrimination than whites (Ray and Preston 2009). Dion and Kawakami (1996) find visible minority immigrants in Toronto experience workplace discrimination more often than white immigrants, such as Italians, Jews, and Portuguese. Li (2000) corroborates these findings by demonstrating visible minority immigrants earn less than white immigrants in MTV when other observable characteristics are taken into account.
Several US studies argue visible minorities may define themselves more flexibly within the racial hierarchy in non-traditional destinations, where the histories and cultures extensively informed by race and ethnicity are often non-existent (Hernández-León and Zúñiga 2000; Marrow 2009). Yet qualitative research shows visible minority immigrants in a non-traditional destination like Atlantic Canada face labor market challenges. For example, Ralston (1991) reports South Asian women in Nova Scotia have been treated differently than whites by employers because of their ethnoracial backgrounds. Fearing racial discrimination, some South Asian women have stopped seeking employment. As Flint (2008) finds, although most immigrants in rural Nova Scotia are highly skilled, they still encounter difficulties securing employment due to racial discrimination. Further, in a recent case study conducted in Newfoundland and Labrador, Baker (2013) documents how one black immigrant woman felt racially discriminated against when she did not land a job despite her qualifications. This experience discouraged her from applying to work in the province again.
It is difficult to generate a hypothesis about the association between visible minority status and earnings in Atlantic Canada compared to MTV, as no research has considered the racial earning gap between visible minority and white immigrants in Atlantic Canada per se. However, the aforementioned studies suggest visible minority immigrants may face discrimination at work, and this may translate into earning disadvantages.
Ethnic Businesses and Earnings in Atlantic Canada and MTV
Since immigrants tend to lack human capital specific to the host country, they often end up in low-level jobs with few entry barriers (Massey et al. 1993). Because these immigrants suffer “low prestige, low income, job dissatisfaction, and the absence of return to past human capital investment,” employment in ethnic businesses can be a viable alternative (Wilson and Portes 1980, pp. 301).
While the literature agrees being employed in ethnic businesses is economically more beneficial than being unemployed (Zhou 2004), how such employment influences immigrant earnings remains unclear (Li and Dong 2007). The enclave economy thesis considers any ethnically sheltered economy as an alternative pathway to upward mobility, as enclave economies tend to place more value on immigrants’ cultural and linguistic knowledge of their origin countries than do mainstream labor markets. This suggests immigrants can obtain jobs in an enclave economy without having host-country-specific human capital (Portes and Sensenbrenner 1993; Wilson and Portes 1980). But Sanders and Nee (1996) argue it is only ethnic entrepreneurs, not wage workers, who benefit from participation in enclave economies. In ethnic businesses, employees tend to earn much less than employers (Fong and Hou 2013; Light et al. 1994; Robles and Cordero-Guzman 2007; Zhou and Logan 1991). This may be because the ethnic networks sustaining ethnic enclaves often prevent employees from participating in labor unions (Kwong 2001; Sanders and Nee 1996).
More employment opportunities exist in ethnic enclaves of immigrant groups who “concentrate in a distinct spatial location and organize a variety of enterprises serving their own ethnic market and/or the general population” (Portes 1981, pp. 290–291). Although research confirms ethnic enclaves clearly exist in MTV (Li 2000; Warman 2007), they are scarce in Atlantic Canada, largely because of the smaller immigrant population (Akbari 2013). Consequently, employment opportunities in ethnic businesses in Atlantic Canada, whether self-employed or employed by co-ethnic business owners, are minimal. As employees in ethnic businesses tend to earn less than their counterparts in the mainstream labor market and employment opportunities in ethnic businesses are far fewer in Atlantic Canada than MTV, we hypothesize the connection between working in an ethnic business and lower earnings may be less salient in Atlantic Canada than MTV.
Data and Methods
We use data from the confidential master file of the 2006 Census of Canada. Use of the master file benefits this research, as it covers 20% of the total Canadian population, a much larger sample than the public use microdata file (2.7% sampling rates). This is an advantage for the present study, given our interest in a small subset of the Canadian population—immigrants in Atlantic Canada.
Analytical Plan and Samples
Previous studies suggest selective migration may play a role in explaining the differences in the economic outcomes of immigrants who are settled in non-traditional versus traditional destinations. It is well known that migration is often driven by networks (Massey et al. 1993). Immigrants are likely to rely on established networks when they decide where to settle in the host country. In this sense, as networks are concentrated in places where immigrant and ethnic communities are already established, it is not surprising that the majority of immigrants settle in MTV in Canada. By contrast, migration into new destinations, including Atlantic Canada, can be initiated by pioneer migrants, who start new migration flows and establish new migratory patterns. Moreover, as they often do not rely on existing migrant networks, pioneer migrants may be “innovators and early adopters,” who are highly ambitious and motivated with high levels of human capital (de Haas 2010, pp. 1599). Given that Atlantic Canada has smaller immigrant and ethnic communities than MTV, immigrants with higher levels of human capital may self-select to settle in Atlantic Canada, rather than MTV.
Given the possibility of selective migration discussed above, we conduct three sets of analyses for this study. Using descriptive statistics, we first compare observable characteristics, such as demographic and socioeconomic characteristics, of immigrants and the Canadian-born in Atlantic Canada and MTV. Second, we examine differences in the earnings of immigrants compared to the native-born between Atlantic Canada and MTV, while controlling for observable individual and contextual characteristics. These two analyses consider the selectivity of immigrants into Atlantic Canada versus MTV and to examine differences in regional contexts surrounding immigrants. Third, to test our hypotheses, we conduct multivariate analysis of immigrant earnings. It compares whether the impacts of language(s) spoken at home, levels of education, places of the highest education attained, visible minority status, and language(s) spoken at work on immigrant earnings are different between Atlantic Canada and MTV.
The sample of the analysis includes immigrants (permanent residents of Canada) and the native-born in Atlantic Canada and MTV. All are aged 25 to 64, working in part-time or full-time jobs with positive earnings in 2005. For immigrants, we limit the sample to those with at least some postsecondary education. While we are interested in the role of foreign educational credentials on immigrant earnings, the 2006 Census collected information on the place of highest education attained only for those who pursued postsecondary education. In the end, our weighted sample includes 29,270 and 1,336,550 immigrants and 909,930 and 2,746,210 Canadian-born in Atlantic Canada and MTV, respectively.
Dependent Variable
The dependent variable is logged weekly earnings from wage work and self-employment in 2005. The natural log of weekly earnings has been widely adopted in economics and sociology, as it allows researchers to correct the skewness of weekly earnings and obtain smaller error terms for lower and higher earnings in regression analysis. Log transformation also allows results to be presented as percentages (Li and Dong 2007).
Independent Variables
The analysis includes five sets of independent variables: education, English/French language use at home, place of education, visible minority status, and ethnic business. First, we include one’s highest level of education attained. For the Canadian-born sample, the education variable consists of five categories (0 = without a high school diploma; 1 = a high school diploma; 2 = some post-secondary education; 3 = Bachelor’s degree; 4 = postgraduate education). For immigrants, this variable has only three categories (0 = some post-secondary education; 1 = Bachelor’s degree; 2 = postgraduate education), given that the sample is limited to those with at least some postsecondary education.
Second, speaking any official language at home is a factor of human capital and an important predictor for earnings among immigrants (Chiswick and Miller 1999). As such, we use the language(s) spoken most often at home as its proxy (0 = English and/or French; 1 = non-English/French language(s)).
Third, the 2006 Census data allow us to examine the impact of immigrants’ foreign credentials on earnings, as it is the first Canadian Census to collect information on the place where an individual obtained his/her highest education. We create three categories on the variable for foreign credentials (0 = Canada; 1 = US/UK/Western or Northern Europe; 3 = less developed countries). This coding reflects previous studies finding those with education from the US, the UK, and Western and Northern Europe tend to earn more than those from less-developed regions (Bauder 2003; Buzdugan and Halli 2009).
Fourth, the analysis includes visible minority status (0 = whites; 1 = visible minorities) to examine whether visible minority immigrants experience earning disadvantages.Footnote 2 Admittedly, it is difficult to assess the impact of racial discrimination on earnings using Census data because employers’ discriminatory attitudes/behaviors toward visible minorities are not measured in the Census similar to most surveys (Frank et al. 2013). We use visible minority status and consider the possibility of racial discrimination when its impact persists after controlling for a number of observable characteristics (Quillian 2006; Yoshida and Smith 2008). However, it is important to note that other unobserved factors (e.g., motivation and talent) may also influence immigrant earnings.
Fifth, we examine the economic impact of employment in ethnic businesses in Atlantic Canada and MTV. This study follows Li and Dong (2007), who use the language spoken most often at the workplace as a proxy for participation in ethnic businesses (0 = official language(s); 1 = non-official language(s)). The researchers argue the common minority language used at the workplace is a major indicator of ethnic enclaves.
Control Variables
We include seven individual-level control variables expected to influence one’s earnings: gender, marital status, age (and age squared), occupations, full-/part-time work, and length of residence in Canada (only for the models for immigrants). Gender is included given the persistent gender pay inequity in Canada (Tastsoglou and Preston 2005). We control for marital status because married individuals tend to earn more than never married ones (Schoeni 1995). Age and age squared are included as a proxy of work experience, which often curves off towards the end of an individual’s career (Murphy and Welch 1990). The occupation variable is based on the National Occupational Classification. For the work status variable, full-time work is defined as working mostly 30 or more hours per week in 2005, whereas part-time work is classified as less than 30 h/week of employment (Fortin et al. 2012). Further, we control for the length of residence in Canada for immigrants-only models, considering recent arrivals may lack job-related networks and information compared to those who have been in Canada for a longer period (Frank et al. 2013).
Given the possible impacts of local characteristics on one’s earnings, we also control for contextual characteristics in the analysis. Specifically, we include five variables measured at the Census Division level: the percentage of people aged 15 and older with manufacturing jobs, unemployment rates (for people aged 15 and older), the percentage of people aged 25–64 without high school diplomas, the percentage of immigrants, and the percentage of visible minorities. As manufacturing traditionally provides well-paid “good” jobs, residents in the areas where manufacturing is “the dominant sector of employment and job opportunities” may have higher earnings (McConnell and Leclere 2002, pp. 185). The earnings of individuals in communities where unemployment rates are high may be lower, as their social interactions may be limited to the unskilled, low-skilled, and unemployed (Jensen and Seltzer 2000). It is possible that their exposure to information about job opportunities may be limited to unskilled and low-skilled jobs, which can lead to lower earnings. For a similar reason, we also control for the percentage of people without high school diplomas. Information about high-paying jobs may be limited in communities where there is high concentration of less-educated people. Also in places where immigrants and visible minorities are less concentrated, prejudice toward these populations may be lower, given that local residents have limited contacts with them (Atiles and Bohon 2002).
Analytical Techniques
First, univariate analysis is employed to compare the characteristics of immigrants and the Canadian-born in Atlantic Canada and MTV. We use the chi-squared test and ANOVA to assess whether the demographic and socioeconomic characteristics of immigrants in Atlantic Canada are statistically different from those of their MTV counterparts.
Second, we use the ordinary least squares (OLS) regression models to examine whether immigrants’ earnings relative to their native-born counterparts are different between Atlantic Canada and MTV. The models can be expressed in mathematical forms as follows:
where y j represents the weekly earnings of an individual j; α 0 is the intercept; β 1, β 2, β 3, β 4…, β p are coefficients; IMMG, AC, IMMG * AC, χ 4 …, χ p are the independent/control variables; and ε denotes the error term. IMMG represents respondents’ immigrant status (0 = the native-born; 1 = immigrants), and AC stands for place of residence (0 = MTV; 1 = Atlantic Canada).
We further run OLS models for immigrants in Atlantic Canada and MTV separately. They can be expressed as follows:
where y j represents the weekly earnings of an individual j; α 0 is the intercept; β 1, β 2,…, β p are coefficients; χ 1, χ 2,…, χ p are the independent/control variables; and ε denotes the error term. As the dependent variable is logged, we interpret the results in percentage terms.Footnote 3 We account for clustering at the Census Division level using STATA 14.
Further, Student’s t test is employed to determine whether the impacts of independent variables on weekly earnings are significantly different in Atlantic Canada and MTV. This is expressed as
where β 1 and β 2 stand for the coefficients in the models for Atlantic Canada and MTV immigrants, respectively (SE indicates a standard error) (Paternoster et al. 1998). We use the t value of 1.96 to assess whether the impacts are significantly different at p = 0.05 level in the two destinations (t > 1.96 indicates as such).
Results
The demographic and socioeconomic characteristics of the samples, immigrants and the native-born in Atlantic Canada and MTV, are shown in Table 1. Immigrants in both Atlantic Canada (46.5 years old) and MTV (43.2 years old) are older than their native-born counterparts (43.4 and 41.9 years old, respectively). Recent immigrants (those in Canada less than 10 years) are better represented in MTV (35.2%) than Atlantic Canada (23.1%). While immigrants in Atlantic Canada (27.9%) are less likely to hold Bachelor’s degrees than their counterparts in MTV (35.6%), the percentage of those with postgraduate education is higher in Atlantic Canada (26.2%) than MTV (15.6%). Use of official language(s) at home is more prevalent in MTV (82.3%) than Atlantic Canada (51.2%). A higher percentage of immigrants in Atlantic Canada obtained their highest education in Canada (57.2%) than in MTV (47.2%), whereas holding highest education from less developed countries is less common in Atlantic Canada (17.2%) than in MTV (43.3%). Further, we find visible minority immigrants are less represented in Atlantic Canada (27.2%) than MTV (67.1%). Finally, a smaller share of immigrants in Atlantic Canada (1.6%) speak non-official language(s) at the workplace than in MTV (5.7%). In summary, demographic and socioeconomic characteristics of immigrants are notably different between Atlantic Canada and MTV. Much smaller proportions of immigrants and visible minorities and higher levels of immigrant human capital in Atlantic Canada may point to the possibility of selective migration to this region.
Table 2 shows the contextual characteristics of Atlantic Canada and MTV at the Census Division level. Unemployment rates are much higher in Atlantic Canada (11.6%) than MTV (6.5%). The percentage of people with manufacturing jobs in Atlantic Canada (5.3%) is lower than that of MTV (5.8%), whereas the percentage of people without high school diplomas is much higher in the former (20.6%) than the latter (12.4%). As expected, the percentages of immigrants and visible minorities in Atlantic Canada (3.8 and 2.7%, respectively) are notably lower than those in MTV (34.8 and 32.3%, respectively).
Moreover, we examine the differences in the earnings of immigrants and the Canadian-born in Atlantic Canada and MTV controlling for individual and contextual characteristics (Table 3). Model 1 shows immigrants in Atlantic Canada earn 33.4% more than their counterparts in MTV. Although the earning advantage of immigrants in Atlantic Canada declines (15.0%) when individual characteristics are adjusted, the earning differences between immigrants in Atlantic Canada and MTV remain statistically significant (Model 2). Such earning advantage of immigrants in Atlantic Canada is unchanged even after we control for contextual characteristics (Model 3). We can conclude that highly educated immigrants in Atlantic Canada still fare better than those in MTV when the possibility of selective migration and differences in local labor markets and workforce are taken into account.
In Table 4, we assess the net impacts of the independent variables of interest (language at home, the level and location of the highest education attained, visible minority status, and language at work) on logged weekly earnings of immigrants in Atlantic Canada and MTV separately, while controlling for other individual characteristics and contextual characteristics. The main findings are threefold. First, immigrants’ human capital is associated with weekly earnings in either Atlantic Canada or MTV, yet its magnitude varies by the destination. In Atlantic Canada, having postgraduate education is associated with greater earning advantage (44.3%) than in MTV (32.2%). However, the cost of having lower official language proficiency (represented by using non-English/French language at home) and the earning advantage of holding Bachelor’s degrees are not statistically different between the two destinations (p > 0.05).
Second, the cost of having foreign credentials is pronounced among immigrants in Atlantic Canada—a striking contrast from the experience of immigrants in MTV. In Atlantic Canada, there is no statistical difference in the estimated earnings between internationally educated immigrants and their Canadian-educated counterparts. By contrast, where immigrants obtained their highest education makes a difference in MTV. In MTV, immigrants with credentials from less developed countries earn 14.5% less than their Canadian-educated counterparts, whereas those who received their highest education in developed countries (e.g., US, UK, Australia, Western or Northern Europe) earn 3.2% more than their Canadian-educated counterparts. And notably, the cost of having credentials from less developed countries is statistically different between MTV and Atlantic Canada.
Third, visible minority immigrants encounter earning disadvantages in both Atlantic Canada and MTV. Compared to whites, visible minority immigrants earn 8.9 and 10.7% less in Atlantic Canada and MTV, respectively, but the impact of visible minority status on earnings is not statistically different between the two destinations (p > 0.05). In other words, visible minority immigrants are equally vulnerable to lower earnings in both traditional and new destinations.
Finally, the language(s) spoken most often at work is associated with lower earnings in MTV (p < 0.001) but not in Atlantic Canada. While immigrants who speak non-official language(s) most often earn 18.9% less than those who speak English/French at work in MTV, there is no such negative association between the use of non-official language at work and weekly earnings for immigrants in Atlantic Canada. And such earning disadvantages of using non-official language at work are statistically different between Atlantic Canada and MTV.
Results for the control variables are also worth noting. For one thing, gender leads to different levels of earnings among immigrants in Atlantic Canada and MTV. In Atlantic Canada, male immigrants earn 32.7% more than their female counterparts, which is twice the gap of MTV. Also, contextual characteristics have different impacts on immigrant earnings between Atlantic Canada and MTV. Higher unemployment rates and higher percentages of people with less than high school diplomas and visible minorities have stronger impacts on immigrant earnings in Atlantic Canada than MTV, although higher percentages of manufacturing jobs and immigrants have weaker impacts in Atlantic Canada.
Discussion and Conclusions
Although the federal and provincial governments both aim to recruit more immigrants in non-traditional destinations in Canada, little is known about the economic well-being of immigrants outside the traditional destinations such as Montreal, Toronto, and Vancouver (MTV). This study has addressed this gap by comparing the earnings of immigrants in Atlantic Canada with those of immigrants in the traditional destinations of MTV, with a focus on the impacts of human capital, racial discrimination, credentialism, and employment in ethnic businesses.
We find the returns to postgraduate education on immigrant earnings are higher in Atlantic Canada than MTV. Similarly, earning disadvantages associated with having foreign credentials from less developed countries are smaller in Atlantic Canada than MTV. These findings point to the importance of understanding the intersection between credentialism and regionalization of immigrants. First, compared to the labor market in MTV, there may be a limited supply of highly skilled workers in Atlantic Canada (Akbari 2011). This is further corroborated with our findings that the attainment of postgraduate education is particularly low among the native-born in Atlantic Canada (4.3%), compared to those in MTV (7.3%). Second, with the introduction of PNPs in Atlantic Canada, a large proportion of new immigrants may have skills and knowledge matching the needs of local economies (Pandey and Townsend 2010). Interestingly, this claim is supported by our descriptive analysis; we find immigrants in Atlantic Canada are significantly more educated than those in MTV. Arguably, the regional recruitment of immigrants to fulfill local economic needs may enhance the chance of successful economic integration as well.
We also find the impact of speaking non-official language(s) most often at home on earnings is not statistically different in Atlantic Canada and MTV. In other words, host country-language proficiency is critical in the economic well-being of immigrants, regardless of their destination of settlement. This may reflect the use of PNPs in Atlantic Canada. PNPs aim to recruit immigrants with skill sets suitable to the local job demands, often prioritizing highly skilled immigrants (Bagley 2012). Therefore, employers may expect immigrants to be highly functional in host-country languages. In any event, having command of English and/or French is equally important in Atlantic Canada and MTV. As language training is considered useful for immigrants to achieve economic mobility, providing more opportunities to learn English and French would be a useful policy option for the successful economic integration of immigrants with a limited ability to speak English and/or French (Kaida 2013).
Moreover, we find earning disadvantages are encountered by visible minority immigrants in both Atlantic Canada and MTV to the same extent. While previous research has shown the earning disadvantage faced by visible minority immigrants in Canadian gateway cities with large visible minority populations (Dion and Kawakami 1996; Li 2000; Ray and Preston 2009), this paper contributes to the literature by demonstrating such disadvantages are found in non-traditional destinations as well. This is consistent with qualitative research on Atlantic Canada suggesting immigrants’ experience of employment-related racial discrimination (Baker 2013; Flint 2008; Ralston 1991). Although several US studies argue racial hierarchies are less firmly established in non-traditional destinations (Hernández-León and Zúñiga 2000; Marrow 2009), our study suggests employers in Atlantic Canada and MTV may possess similar prejudices against non-white immigrant workers. One promising policy option for Atlantic Canada would be to urge employers to minimize racial discrimination in all aspects of employment (e.g., hiring, promotion, pay raise). Such policy initiatives might help immigrants achieve higher earnings and remain in the region. This, in turn, could attract more immigrants, arguably a viable way to mitigate the region’s population decline (Kaida and Martin 2014).
Further, we find immigrants’ earning disadvantages linked to working in ethnic businesses are smaller in Atlantic Canada than MTV. Admittedly, this finding is consistent with previous research that finds immigrants who are employed in ethnic businesses tend to earn less than those in the mainstream labor market (Fong and Hou 2013; Light et al. 1994; Robles and Cordero-Guzman 2007; Zhou and Logan 1991). However, our study demonstrates the importance of nuanced implications of the cost of working in ethnic businesses for immigrants’ economic integration by destinations. It may be that being employed in ethnic businesses in Atlantic Canada has a minimal impact on earnings because of the region’s relatively small immigrant population (Akbari 2013).
Our comparison of the earnings and its determinants among immigrants in Atlantic Canada and MTV makes a notable contribution to the emerging new immigrant destination research with Canadian evidence. Similar to the US findings about Latino immigrants in nonmetropolitan areas (McConnell and Leclere 2002; Potochnick 2014; Stamps and Bohon 2006), our analysis of the 2006 Canadian Census shows immigrants in a new destination—Atlantic Canada—are faring better than their counterparts in traditional destinations (MTV). Those immigrants in Atlantic Canada are not penalized for having foreign credentials, which is in stark contrast to those in MTV. In other words, re-accreditation barriers faced by internationally trained immigrant professionals, which has become a cliché in immigrant economic integration in Canada, may not necessarily apply to this new immigrant destination (Reitz 2001). As Winders (2014) argues, evidence from new immigrant destinations indeed adds new knowledge to our understanding of immigrant incorporation.
Finally, some limitations to this study should be acknowledged. First, although the finding about the earning advantage of immigrants in Atlantic Canada over MTV may be encouraging news to policymakers in Atlantic Canada in promoting its destination to newcomers, this finding needs careful interpretation. Similar to a number of existing empirical works on new immigrant destinations, our statistical models do not consider the possibility of selective migration associated with immigrants’ unobserved characteristics (e.g., motivation, ability, talents), which may partly account for their advantage (Gresenz et al. 2012; McConnell and Leclere 2002; Monnat 2016; Potochnick 2014; Stamps and Bohon 2006).
Second, because of the small sample size, we lump the four Atlantic Canadian provinces together. As these provinces have different labor markets and ethnically different immigrant populations, future studies, especially qualitative ones, would benefit from exploring the labor market experiences of immigrants in the four provinces separately (Akbari 2013).
Third, while PNPs are an important aspect of immigration in Atlantic Canada, the Census data do not include information on immigrants’ entry class, such as PNP, economic, family, or refugee classes. Use of alternative data containing information on immigrant entry class, such as the Longitudinal Administrative Databank linked to the Longitudinal Immigration Database, may be a promising research direction.
Notes
Quebec has its own immigration policies and does not recruit immigrants using PNP.
Aboriginal populations, who are neither visible minorities nor whites, are excluded from the analysis.
Percentage can be calculated with (exp(β) − 1) × 100 for categorical variables and (exp(β)) × 100 for continuous variables.
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Acknowledgements
The authors thank Yoko Yoshida and JIMI’s anonymous referees for helpful comments. Thanks also to Elizabeth Thompson for her editorial support. The analysis presented in this article was conducted at the Western and Memorial University Research Data Centres (RDCs), which are part of the Canadian Research Data Centre Network (CRDCN). The services and activities provided by the Western and Memorial RDCs are made possible by the financial or in-kind support of the Social Sciences and Humanities Research Council (SSHRC), the Canadian Institutes of Health Research (CIHR), the Canada Foundation for Innovation (CFI), Statistics Canada, Western University, and Memorial University of Newfoundland. The views expressed in this article do not necessarily represent those of the CRDCN’s or its partners.
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Sano, Y., Kaida, L. & Swiss, L. Earnings of Immigrants in Traditional and Non-Traditional Destinations: A Case Study from Atlantic Canada. Int. Migration & Integration 18, 961–980 (2017). https://doi.org/10.1007/s12134-017-0512-6
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DOI: https://doi.org/10.1007/s12134-017-0512-6