1 These selection policies do not usually apply to family and refugee immigrants.
2 The Canadian system contains some elements of an employer-driven system. Applicants are assessed on the basis of their characteristics using a points system and receive additional points if they have a job offer. However, prior to changes in the program that occurred after our study period, the points for a job offer were only a small share of the total required to qualify (Beine et al. 2016).
3
Bertoli et al. (2016) discuss issues with selecting immigrants based on observable characteristics. Also, see (Belot and Hatton 2012) for a review of the selection of immigrants by level of education in OECD countries.
4 Recent studies for Canada include (Abbott and Beach 2011; Aydemir 2011; Green and Worswick 2012; Picot and Piraino 2012; Sweetman and Warman 2014; Hou and Bonikowska 2015). Clarke and Skuterud (2013) compare the performance of immigrants to Australia and Canada to determine which country does better in selecting immigrants. Using longitudinal data, (Kaushal et al. 2015) compare the earnings and employment growth of immigrants in Canada and the USA. van de and Voitchovsky (2015) provide a review of the Australian skilled immigrant selection program. For a review of the literature, see (Kerr and Kerr 2011) and (Gaston and Nelson 2013).
5
van de and Voitchovsky (2015) document the expansion of employer-driven immigration in Australia and find that it had a positive effect on short-term employment of skilled immigrants.
6 Another recent change in the Canadian immigration selection policies has been the introduction of Provincial Nominee Programs. While these programs are largely employer-driven, some streams within the programs provide a pathway to permanent resident status for temporary workers without a job offer. For example, in Alberta, temporary workers that reside and have sufficient work experience in select occupations within the province are eligible for admission through the Strategic Recruitment Stream without a job or a job offer.
7 For temporary workers, the CEC requires 12 months of full-time skilled work experience. There is still a language skills requirement, but unlike the Federal Skilled Worker program, there is no formal education requirement.
8 The IMDB only has information on immigrants that filed taxes at least once between 1982 and 2012. For further details, see Section 2.
9 The first year in which immigrants were admitted through the CEC was 2009. In 2014, 9.6 % of principal applicants admitted through an economic program came through the CEC (CIC 2015).
10 Economic categories include the Federal Skilled worker program, the Canadian Experience Class, and the various Provincial Nominee Programs.
11 Similar to our findings, (Ostrovsky 2012) reports that approximately 20 % of immigrants filed income taxes prior to immigration.
12 Of prefilers obtaining landed immigrant status after 1991, 97 % filed taxes 6 or fewer times prior to landing with 90 % of these filing taxes continuously in Canada in the years immediately prior to immigration.
13 Using earlier arrival years increases the likelihood that an immigrant had filed taxes in a year not covered in the IMDB.
14
Aydemir and Skuterud (2005) use Canadian census data, and (Green and Worswick 2010) use data from the IMDB. However, both studies use data for immigrants to Canada through all programs: economic, family, and refugee.
15 Western countries include Europe, the USA, and Oceania. Similar to our approach, Aydemir and Skuterud (2005) allow the returns to differ between Western and Eastern countries.
16 Workers on temporary work visas are admitted on work visas through Canada’s Temporary Foreign Worker program.
17 See (Hanson and Slaughter 2013) and (Kahanec and Zimmermann 2011) for a discussion on high-skilled immigration programs in the USA and Europe, respectively.
18 The comprehensive immigration reform bill, the Border Security, Economic Competitiveness and Immigration Modernization Act of 2013, was passed by the Senate in June 2013 but is pending approval from the House of Representatives.
19 Given that (Hou and Bonikowska 2015) have data for the visa status of prefilers, they are able to evaluate differences in the earnings for prior work experience only, prior work and study experience, prior study experience, and prior other experience. They find that, compared to non-prefilers, prefilers with Canadian work permits had significantly higher earnings, with the largest advantage for prefilers with skilled employment. However, they find no evidence of an earnings advantage for prefiler international students without Canadian work experience. The data for visa programs for prefilers is only available within Statistics Canada; the dataset available to external researchers does not provide this information. We are thus unable to determine the differences between prefilers who are admitted in Canada through different visa programs.
20 The data is available remotely from Statistics Canada. Researchers are required to submit their program codes to a Statistics Canada analyst who executes it, vets the output, and sends the results to the researcher. The vetting of output is done to ensure confidentiality of the data is preserved. Summary statistics and counts are rounded (for example, the number of observations used in the regression analysis is rounded to the nearest five), but regression coefficients and standard errors are reported “as is.”
21 We exclude economic class immigrants who immigrate through the home caregiver program from our analysis, as these immigrants are selected based on criteria that differs substantially from other economic classes (Hou and Bonikowska 2015). In addition, we include only immigrants that provided valid responses (excluding “unknown”) to the various questions (demographics, source region, etc.) on the landing document.
22 The IMDB does not include information on visas issued to immigrants prior to obtaining immigrant status.
23 Employment earnings is the sum of employment and self employment income reported in the tax returns filed by individuals.
24 In addition to issues with censoring, this exclusion was further necessitated by administrative errors in coding the educational attainment of immigrants landing in 2010 and 2011.
25 The summary statistics used and reported in this section are derived from a set of custom tabulations compiling summary statistics for cells of immigrants based on sex, year of arrival, years since arrival, whether or not education full-time credits were claimed, and whether or not immigrants were from Western countries. Unless otherwise noted, summary statistics are computed as weighted averages using the cell counts.
26 Foreign experience is imputed by subtracting 6 years plus an estimate of years in school from age at arrival. This adjustment factor varies by level of education as follows: 15 for secondary or less, 19 for individuals with a trade certificate or apprenticeship, 21 for individuals with some university but not a degree, and 23 for individuals with at least a university degree.
27 To capture the Canadian business cycle patterns, we divide the time period 1988–2009 into seven arrival period cohorts: 1988–1989, 1990–1992 (recession), 1993–1996 (recovery), 1997–1999 (boom), 2000–2003 (dotcom bust), 2004–2007 (recovery), and 2008–2009 (financial crisis). As with (Aydemir and Skuterud 2005), we do not include interactions of ysa2 and the cohort dummies. This is done to avoid issues of collinearity with the most recent cohort, which is only observed for a few years after arrival.
28 For example, a 35-year-old immigrant with a university degree is assumed to have been in school until 22 years of age, resulting in 13 years of subsequent work experience.
29 Seasonally adjusted annual provincial unemployment rates for individuals aged 25 years and older were obtained from CANSIM Table 2820087.
30 Previous studies (see, for example, Aydemir and Skuterud 2005; Green and Worswick 2012) define arrival of an immigrant as the year that permanent residence was obtained. In our study, arrival year for prefilers is the first year in which they filed taxes.
31 The decomposition is undertaken using the estimated regression coefficients to obtain fitted means for the two groups of immigrants.
32 Model 2 estimates for females imply that the earnings of observationally equivalent prefiler and non-prefiler females converge in about 4 years.
33 We split total experience into Canadian and foreign experience by defining Canadian experience as the number of years in Canada since arrival and then computing the foreign experience as the difference between total experience and Canadian experience. In our regression, the quadratic in total experience is replaced by quadratics in each of Canadian and foreign experience and an interaction term between between the two.
34 This may be due to systematic differences in the types of prior experience of male and female prefilers. Hou and Bonikowska (2015) find that for males with prior experience, 34.6 % were on skilled work visas, while another 18 % were on a combination of student and skilled work visas. For females, the corresponding figures were 21.7 and 13 %, respectively. In their framework (see footnote 19), prior skilled work was associated with the largest earnings advantage.
35 West takes a value of 1 for immigrants from Europe, the USA, and Oceania.
36
Aydemir and Skuterud (2005) find lower returns to foreign experience for immigrants from Eastern countries. However, the countries classified as Eastern in their study are not the same as the countries classified as Rest.
37 The coefficient on the interaction between West, prefil, and fexp is positive and statistically significant at the.10 level.
38 Among female prefilers, 68.4 % from the West and 44.7 % from the Rest had a university degree. Hence, the preimmigration experience of West prefilers would be in more skilled occupations than that of the Rest. Such differences in the type of preimmigration experiences of female immigrants from the West and the Rest may explain why prefilers from the latter group do not have the same earnings advantage as the former group.