Paper written by: Dr. Aydemir and Dr. Skuterud Presentation by: Curt Pollock, Marc Dales, Levon Sarmazian, Jessica Lindgren and Chad Johnson

Introduction Recent male cohorts face lower entry earnings Recent immigrants faced with more difficult challenges Policy implications Immigration is the main source of Canada’s population growth

Agenda Returns to foreign education Marc Returns to foreign experience Levon Shifts from traditional source countries Jessica Canada’s economic status during immigration year Chad

Model Used Breaks down experience and years of schooling into Canadian and Forgiven factors. Uses interaction terms (Cohort, Canadian Experience) to show if immigrants who gain Canadian experience face less deterioration as time progresses.

Overall Findings Found decreasing return’s to earnings In 1999 immigrant males entry earnings were less than 1969 by 27%. Entry earnings decrease of 22% for females. Evidence entry earnings is increasingly decreasing Entry earnings has continuously decreased for every additional cohort. 61 log points less for male earnings & 63 log points less for female earnings in 1990’s as compared to 1960’s.

Returns to Foreign Education Similar returns for an additional year of education For immigrant men the return to foreign school years is 6.1 percent, slightly higher than the return to Canadian years of 5.7 percent. For immigrant women Canadian school years raise earnings by 7.3 percent, compared to 6.8 percent for foreign years. No evidence that return to foreign education is decreasing over additional cohorts Therefore no decreasing returns for foreign education was found

Effects of Foreign Experience Clear deterioration in the returns to foreign labour market experiences among immigrant men and women Post cohorts, foreign experience is valued less than native-born experience Cohorts after the period have lower returns to foreign experience Shift from “Western” to “Eastern” source immigrants Economic class to refugees

Language ability - A shift from English as mother tongue to foreign mother tongue immigrant cohort estimates - Declined from 34% to 30% immigrant cohort estimates - Declined from 27% to 23%

Region of Birth - Move from ‘traditional’ source countries immigrant cohort - 65% ‘traditional’ source countries - 13% ‘non-traditional’ source countries immigrant cohort - 14% ‘traditional’ source countries - 54% ‘non-traditional’ source countries

Contributing Factors Language effect Earnings for foreign mother tongue immigrants are 9% lower Region effect Earnings for immigrants from Asian regions are 14-16% lower than North American immigrants

Cont. 1/3 of the decline in entry earnings can be explained by shifts in immigrant’s language abilities and their region of origin Unable to identify underlying factors: Language effect Might capture real productivity differentials Region effects Might reflect omitted or unobservable characteristics Direct wage effect Correlated with the region of birth

Early 1990s recession Unemployment rates peaked 1992 and 1993 Followed by recovery where gains made in the self employment sector Recession and Recovery

Less success because less familiar Less social networks Year of labour market defined as year following final year of school Upward trend in the unemployment rate and downward trend in the native cohort effects Effect on Immigrants

Coefficients on cohort dummies did not interact with immigrant status Suggests a pattern of deteriorating earnings across native-born labour market entry cohorts Similar deterioration among native born women The cohort effect estimate for men statistically significant at the 10% level Results

Suggests that if not for decreasing returns in foreign experience the earnings of Canadian men most recent immigrants would be higher than equivalent immigrant men from the 1960s. The positive cohort effects overstate or understate the earning’s potential of Canada’s most recent immigrant cohorts Cont.

Conclusion No evidence exists to support a decline in the returns to foreign education Exists a deterioration in returns to foreign labour market experience Shift away from traditional source countries Recent immigration cohorts would face the same entry earnings as previous cohorts

Questions?