What is this research about?
This report examines the Canada–U.S. differences in the occupational skill utilization and earnings of STEM-educated immigrant workers. Using data from the 2016 Census for Canada and the combined 2015 to 2017 American Community Survey, this analysis focuses on immigrants with a university degree in a STEM field who were aged 25 to 64 and arrived as adults.
What do you need to know?
Skills in the science, technology, engineering and mathematics (STEM) fields are increasingly regarded as essential to innovation, productivity growth and competitiveness. In both Canada and the United States, immigrants provide a very large share of the STEM-educated labour and hold a large share of STEM jobs. Furthermore, the selection system for economic immigrants, including the STEM educated, varies significantly between Canada and the United States and likely affects the economic outcomes of immigrants. For these reasons, a Canada–U.S. comparison of the outcomes of STEM-educated immigrants is important. In both Canada and the United States, adult immigrants with at least a bachelor’s degree were twice as likely as their native-born counterparts to have studied in a STEM field and three times as likely to have studied engineering or computer science and mathematics.
What did the researchers do?
The data are from Canada’s 2016 Census of Population 25% sample microdata file (Statistics Canada 2017) and the pooled 2015, 2016 and 2017 American Community Survey (ACS) data from the Integrated Public Use Microdata Series (IPUMS) (Ruggles et al. 2017). Three years of ACS data were pooled to increase the sample size of immigrants in the U.S. data. The study samples were restricted to adults aged 25 to 64 with at least a bachelor’s degree in a STEM field. The analyses focused on adult immigrants who immigrated at age 18 or older, although the native-born population and childhood immigrants (those who immigrated at an age younger than 18) were included in the descriptive tables, and the native-born population was used for earnings comparisons. The study excluded new immigrants who arrived in the census or survey year because of the different data collection procedures in the ACS and Canadian census. In the earnings analysis, those who arrived in the year prior to the census or survey year were also excluded because they may not have stayed for a whole year.
What did the researchers find?
There was a large earnings gap between STEM-educated immigrants and native-born workers in Canada, even after adjusting for sociodemographic differences, while no corresponding earnings gap existed in the United States. The earnings gap in Canada was particularly large for STEM-educated immigrants holding non-STEM jobs.
In both countries, close to one-half of STEM-educated immigrant workers held jobs in STEM occupations, according to the 2016 Census of Canada and the American Community Survey from 2015 to 2017. With similar demographic characteristics, STEM-educated immigrants with STEM jobs in Canada earned 17% less than their Canadian-born counterparts, while such immigrants in the United States earned slightly more than their US-born counterparts.
Among STEM-educated immigrant workers not working in a STEM occupation, labour market outcomes were better in the United States than in Canada. In Canada, 20% of these immigrants held jobs requiring a university degree, compared with 48% in the United States. With similar characteristics, these immigrants in Canada earned 34% less than their Canadian-born counterparts, compared with 7% less in the United States.
In Canada, the skill utilization and earnings of STEM-educated immigrants differed considerably by admission program. Among STEM-educated immigrants in the Canadian Experience Class (CEC), two-thirds found a STEM job, and they earned on average 9% less than STEM-educated Canadian-born workers.
By comparison, among STEM-educated immigrants admitted via the Provincial Nominee Program, 45% found a STEM job, and they earned 20% less than STEM-educated Canadian-born workers. A higher share of STEM-educated immigrants in the Federal Skilled Worker Program worked in STEM occupations, but they had slightly lower average earnings than provincial nominees.
How can you use this research?
Add it to the pile of illuminating research that continues to provide ample evidence about the significant labour market discrimination and disadvantages of newcomer talent to Canada...
The authors offer come discussion points:
Why are the economic outcomes of STEM-educated immigrants better in the United States than in Canada? The authors suggest that little direct research has been conducted on this question, although a number of possible explanations exist, including the following: