Immigrant-non-immigrant wage differentials in Canada: A comparison between standard and non-standard jobs

It is well established that recent immigrants earn considerably less than their native-born counterparts even after adjusting for differences in human capital. Another labour market trend has been the growth in non-standard forms of employment. Since non-standard forms of work are generally less desirable than standard jobs on a number of dimensions including earnings, this study examines the nexus between immigrant earnings and non-standard employment to investigate if there is a systemic connection between the two trends. Consistent with earlier research evidence, we find a substantial earnings disadvantage associated with all forms of non-standard work relative to full-time, permanent employment. Conditioning on observable characteristics, immigrants are less likely to be employed in full-time, permanent work. However, when we examine workers in non-standard jobs, we find that immigrant-non-immigrant earnings gaps are smaller than those observed among workers in standard jobs. Moreover, the unadjusted mean earnings of long-term immigrants in part-time jobs are actually higher than the earnings of similarly employed Canadian-born workers. Finally, considering immigrants from Western and non-Western countries, we find that the earnings disadvantage of non-Western immigrants in non-standard jobs is smaller than the earnings disadvantage of non-Western immigrants in standard jobs. These findings suggest that non-standard jobs provide a point of entry for many new immigrants into the Canadian labour market. But whether these jobs are a bridge to upward mobility or whether they act as traps from which immigrants are unable to escape is a question that needs to be answered with better longitudinal data that track specific cohorts of workers.

Automated summary

Recent immigrants earn considerably less than their native-born counterparts even after adjusting for differences in human capital. Non-standard forms of employment are less desirable than standard jobs, but provide a point of entry for many new immigrants into the Canadian labour market. Immigrants are less likely to be employed in full-time, permanent work but have smaller earnings gaps in non-standard jobs compared to standard jobs.