The Economic Performance of New Immigrants in Quebec
University of Montreal - School of Industrial Relations
School of Industrial Relations, University of Montreal; Institute for the Study of Labor (IZA)
June 15, 2009
Relations Industrielles/Industrial Relations, Vol. 64, No. 2, 2009
A large body of literature has documented a steep deterioration in the economic performance of immigrants in Canada. With very few exceptions, however, existing studies only address the situation at the national (Canadian) level. To our knowledge, the economic performance of immigrants at the provincial level has received little attention in the economic literature. The goal of this paper is to examine the situation in the labour market in Quebec. This province has a broad authority in selecting a significant portion of its immigrants (the 1991 Gagnon-Tremblay/McDougall Accord), a different language – French, a different point system, and its immigrants largely come from countries and continents that differ from the rest of Canada (ROC).
We first examine the evolution of immigration policy in Québec and in Canada over the years up to the beginning of the XXIst century. Then, we look into the evolution of the labour market outcomes of immigrants in Québec by comparing their employment, earnings and unemployment situation, using Census data for similar years in terms of the business cycle (1981 and 2001).
While our introduction stresses the need for knowledge of the Québec immigration record and explains the nature of the methodology used to make adequate comparisons over time, the first section recalls the main events that shaped the history of immigration in Canada from the French Regime to the British and then the Canadian (Confederation) era, focussing on post-Second World War policies, and especially the rupture that occurred in the early 60s through the adoption of a point system. The latter has changed through time. The “new” Québec system abandoned the employment in demand criteria in order to focus on language abilities and education attainments at large. These orientations are clearly reflected in the statistics on the socioeconomic characteristics of the recent cohorts of immigrants. The end of the 90s brought a large influx of diversified, highly educated, French-speaking or bilingual immigrants to the Québec labour market.
Expectations about the impacts of such changes on the economic performance of immigrants are ambiguous. On the positive side, the human capital qualities (language and education) of the new labour market entrants appear, at first, very promising. However, the substantial increase in the labour supply on the host market combined with a great heterogeneity in the training, experience and skills of new immigrants made it unsure to predict any result with certainty. As Chiswick and Miller (2007) argue, “…due to the less-than-perfect international transferability of human capital skills, there is less successful job matching of a foreign-born worker’s skills the longer they have worked in the country of origin prior to immigration.” In order to account for this heterogeneity in the human capital acquired in the country of origin, we broke down our analysis by age at immigration (before the age of 18 versus at or after the age of 18). Some break down is also done for the immigration period. Finally, given the distinct nature and growing importance of female immigrants, we also analyze the situation of immigrants by gender.
The story for the adult male immigrant workers (i.e. those who arrived at the age of 18 or older) is that their employment rate decreased much more and their unemployment increased much more than for natives. In fact, the employment and unemployment rates for natives are approximately the same in 1981 and 2001. We also notice an increase in the unemployment rate for the group of female immigrants who immigrated at the age of 18 or older, and a slight decrease in their employment rate. However, we observe only a small increase in the unemployment rate (0.4 percentage point) and a significant increase in the employment rate (15.6%) for those who arrived under the age of 18.
Other statistics show that the similarity between the education system and labour market experience in the country of origin reduces the risks of failure. Indeed, immigrants coming from the United States and United Kingdom do much better than Asians or Africans, both in terms of employment and unemployment rates. Finally, on the earnings side of the labour market, it appears that there are no more statistically significant differences between immigrants and native workers for either total or full time earnings for female and male immigrant workers as long as these immigrants arrived before the age of 18.
Our conclusion discusses the possible causes and remedies to the overall deterioration of immigrants’ status in the Québec labour market. One possible cause is under capacity. It would call for the development of the overall capacity of the labour market for immigrants, the stimulation of their labour demand and the reintroduction of employment in demand criteria. The second possible cause is the less-than-perfect international transferability of human capital. It could call for a re-evaluation of the selection criteria, a revised and improved selection process, and additional measures of training for the newly arrived. The retention of young international students in Canadian postsecondary institutions would also make a significant contribution to the solution of the problems linked with the elderly who acquired both education and experience outside the country. Finally, the third cause is discrimination, in which case information and a reinforcement of antidiscrimination laws would improve the situation. However, it should be stated that, as is the case for Canada as a whole, the economic situation of immigrants has structurally deteriorated in Québec over the past two decades.
Keywords: immigration policy, socioeconomic characteristics, labour market, human capital
JEL Classification: F22, J24, J40, J60
Date posted: April 13, 2010