Seeking Success in Canada and the United States: The Determinants of Labour Market Outcomes Among the Children of Immigrants

Abstract

This paper reviews the recent research on labour market outcomes of the children of immigrants in Canada and the United States (i.e., the 2 nd generation), and its determinants. The paper focuses on outcome gaps between the 2 nd and third-and-higher generations, as well as the intergenerational transmission of earnings between immigrants (the first generation) and their children. Overall, in both Canada and the United States the labour market outcomes of the children of immigrants are positive. On average they have higher levels of education, and similar labour force participation rates and unemployment rates (no controls) as the third and higher generations (i.e. the children with native born parents). Furthermore, the children of immigrants tend to have higher earnings (unadjusted data). The 2 nd generation is also more likely to be employed in professional occupations than the 3 rd-and-higher generation, reflecting their higher average levels of education, particularly in Canada. However, after accounting for background characteristics, among racial minority groups in Canada the positive earnings gap turns negative. Regarding the determinants of aggregate outcomes, educational attainment may account for up to half of the (positive) earnings gap between the 2 nd and third-and-higher generations. Other important determinants of the wage gap include location of residence and community size, ethnic group/source region background, the "degree of stickiness" in educational and earnings transmission between the 1 st and 2 nd generation, and "ethnic capital". In both Canada and the United States there are large differences in outcomes by source region/ethnic group background. The U.S the sociological literature in particular focuses on possible "downward assimilation" among children of immigrants with Mexican and other Hispanic backgrounds. In Canada, after controls, the 2 nd generation racial minority groups outperform the 3 rd plus generation educationally, but the 2 nd generation with European and American backgrounds do better in the labour market. Based on the trends in the composition of immigrants since the 1980s, and their correlation with 2 nd generation outcomes, the educational and labour market gaps may move in different direction in the two countries in the future; becoming increasingly positive in Canada, and more negative in the U.S.

Economic Benefits of Self‐Employment for Canadian Immigrants

“…The differences between my findings and that of Li's earlier studies are perhaps understandable because this study is based on the Canadian 2006 Census which is more recent than Li's (, ) studies, based on the 1980 and 1990 Censuses. An increasing number of studies since the late 1990s have substantiated that the earnings of new immigrants have deteriorated (Aydemir and Skuterud ; Nakhaie ; Picot and Hou ). They are more likely to live in poverty, often in areas with concentrations of poverty (Hiebert ; Wang and Truelove ).…”

“…They are more likely to live in poverty, often in areas with concentrations of poverty (Hiebert ; Wang and Truelove ). They experience unemployment and suffer from occupational segregation (Kazemipur and Nakhaie ; Nakhaie , ; Nakhaie and Kazemipur ; Picot and Hou ). They also suffer from discrimination (Reitz et al ; Tator and Herny ).…”

“…By , new immigrants who had resided in Canada for five years had a lower chance of employment than those born in Canada (Schellenberg and Hou ), and their comparative earnings had deteriorated. Picot and Sweetman () showed that, compared to immigrants entering Canada in the 1970s, the earnings gap at entry for those entering during the 1990s has increased. Similarly, Frenette and Morissette () showed that the initial earnings of new immigrants who arrived prior to the 1980s were about 83 percent of those born in Canada.…”

Why Do So Many Children of Immigrants Attend University? Evidence for Canada

“…3 See, for example, Abbott and Beach (1993), Aydemir et al (2008), Aydemir and Skuterud (2005), Baker and Benjamin (1994), Bloom et al (1995), Boudarbat and Lemieux (2010), Frenette and Morissette (2005), Grant (1999), Hou (2010), Li (2001), Worswick (1997, 1998), Meng (1987), and Picot (2008). Also, see Reitz (2007a, b) and Picot and Hou (2011b) for comprehensive reviews of the factors behind this decline. and Latin America (including the Caribbean) tend to have lower participation rates than the non-immigrant population.…”

“… See Finnie and Mueller (2009, 2010) andPicot and Hou (2011b) for a more general review of the immigration literature. Here, the focus is on the work most pertinent to the issues addressed in this paper.…”