Huge pay and employment gap between skilled immigrants in Canada and the U.S.
The study defines highly educated immigrants as those with a bachelor’s degree or higher. It found a significant employment and pay disparity between skilled immigrant workers in the U.S. and Canada.
According to the report, Canada has a higher percentage of immigrants with a bachelor’s degree or higher than the U.S.
“Compared to the native-born population, recent Canadian immigrants are substantially more educated than recent immigrants to the U.S., measured against the U.S. native-born,” reads the study. “Moreover, immigrant STEM workers in Canada account for a greater share of the country’s STEM workforce than is the case in the U.S.”
Despite this, the analysis found that highly educated immigrants in the U.S. are more likely to be employed and earn more than their counterparts in Canada.
According to the study, skilled immigrants earn 16 per cent less than those born in Canada and have a 9.5 per cent lower employment rate. While in the U.S., highly educated immigrants have a slightly higher employment rate than those born in America (1.2 per cent) and earn eight per cent more.
Fraser Institute
The analysis cited Statistics Canada data on median employment incomes of visible minority immigrants in 2020. The average income of visible minority immigrants with a bachelor’s degree or higher was $57,000, whereas it was $68,300, on average, for those born in Canada with a bachelor’s degree.
The disparities were even greater for those with advanced degrees. The average income of visible minority immigrants with a master’s degree was $65,500 and $84,400 for those with a doctorate. Workers born in Canada with master’s degrees earned an average of $84,400, while those with a doctorate earned $100,000 on average.
In contrast, highly educated immigrants in the U.S. earned slightly more than highly educated workers born in America. The average household income of skilled immigrants was $122,000, while the average household income for those born in the U.S. was $113,000.
“The evidence suggests that the U.S. offers greater opportunities and rewards than Canada, and therefore is better positioned to attract the most productive, highly-educated and skilled immigrants,” stated Steve Globerman, senior fellow at the Fraser Institute and co-author of the study.
The co-authors suggested possible policy responses the Canadian government could implement to narrow the gaps in labour market performance.
One is to revamp Canada’s immigration system to expand pathways and expedite entry for highly skilled immigrants, building on initiatives adopted in the last few years.
They advised the government to shorten application processing times for the Express Entry pathway; establish a Canadian equivalent to the U.S. H-1B visa program, which allows highly skilled foreign workers to secure a job offer and gain employment with U.S. companies; and rely on input from Canadian employers when selecting skilled immigrants.
The study also suggested allocating a larger share of student visas to individuals studying in fields that will lead to above-average income in the Canadian labour market.
Finlayson and Globerman also stressed that the government should prioritize taking advantage of the “less welcoming environment for international students in the United States under the Trump Administration.”
“We reiterate our view that with the U.S. adopting a far less welcoming immigration policy, now is an opportune time for Canada to increase efforts to persuade more of the ‘best and brightest’ global citizens — notably those with STEM qualifications — to consider Canada as an emigration destination,” reads the report.