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April 04, 2019STUDY: LABOUR MARKET OUTCOMES AMONG REFUGEES TO CANADA Statistics Canada has released a study focused on understanding the economic outcomes of refugees over time, and the variation in economic outcomes of refugees from a range of source countries. Labour market outcomes of refugees aged 20 to 49 upon entry are examined over time by tracking employment rates, as well as comparing average earnings to family-class or economic-class immigrants entering during the same period. It also examines whether the program of entry has an impact on the economic outcomes of refugees.
This research draws on the Longitudinal Immigration Database to examine the outcomes of refugees from 13 countries (or groups of countries) with the largest inflows to Canada over the 1980 to 2009 period. These refugees originate from Afghanistan, China, Columbia, El Salvador, Ethiopia, the former Yugoslavia (as one group), Iran, Pakistan, Poland, Somalia, Sri Lanka, and Viet Nam, Cambodia and Laos (the three countries as one group). This analytical framework will be used to study the outcomes of more recent refugees (including those from Syria) as data become available.
Employment rates
The employment rate for refugees from most countries increased with the number of years spent in Canada. Female employment rates were typically lower than for males with greater variation across refugee groups. The study finds that there is a strong correlation between male and female employment rates - refugee groups with high employment rates among men tended to also have high female employment rates. Those with low employment rates for men also tended to have low employment rates for women. The study notes that to the extent that men and women marry within refugee groups, this correlation would exacerbate lower-income rates and economic inequality between refugee groups.
Earnings between refugee groups
There was also a significant amount of variation in earnings among the 13 refugee groups, even with more time spent in Canada. After ten years in Canada, refugee groups with the highest earnings (the former Yugoslavia, Poland and Columbia) earned roughly double what those with the lowest earnings did (Somalia, Afghanistan, Pakistan and China). Refugee groups with lower employment rates also tended to have lower earnings among the employed, and groups with higher employment rates tended to have higher earnings among the employed, exacerbating the earnings gap between refugee groups.
To understand why some groups had lower average earnings, earnings were adjusted for human capital characteristics like education and language skills, as well as regional economic conditions upon arrival and the refugee program under which the person entered Canada. The difference between the unadjusted and adjusted earnings shows how much of the difference between refugee groups is explained by these characteristics.
In most cases, observable characteristics explained very little of the variation in earnings between refugee groups. For groups with the lowest average earnings, these characteristics accounted for virtually none of the gap. The amount of the gap explained by these characteristics also decreased with the number of years spent in Canada, meaning there are other unobserved factors that explain this difference.
Refugee earnings compared to Family-class immigrants
Immediately after entering Canada, refugees from all 13 countries had lower average earnings than family-class immigrants entering during the same period. However, refugee earnings from many countries grew faster than family-class earnings. Refugee groups from the highest earnings earned more, on average, with more years spent in Canada than family-class immigrants.
However, this was not the case for refugees from the lower earning groups, as even after 15 years in Canada they earned only 50 to 70 per cent of what family class immigrants earned. For these countries, differences in characteristics accounted for only a small share of the gap between refugee and family class earnings. After 5 years, these differences explained less than half of the gap for females, and explained almost none of the difference for males.
Refugee earnings compared to Economic-class immigrants
The earnings gap between refugees and economic-class immigrants tended to be larger than the gap with family class immigrants. Refugee groups with the highest average earnings earned from 55 to 66 per cent of what economic-class immigrants did during their first full year in Canada, but this percentage increased to 75 to 96 per cent 15 years later. Differences in ability and economic conditions explained most of the gap between refugee and economic-class earnings.
Lower earning refugee groups (including Iran, Ethiopia, Iraq, Somalia, Afghanistan, Pakistan and China) had only modest increases in earnings relative to economic-class immigrants, and in the case of Pakistan and China, even saw their relative earnings decline to 35 to 45 per cent over the same period. Differences in observable characteristics explained a much smaller share of the earning gap, and other unobserved factors may explain why this gap persists after 15 years in Canada.
Refugee program
Refugees entering through different streams may have different advantages or resources that help them access resources (i.e. training and language acquisition) that may give them an earnings advantage. The average earnings of refugees entering through different program also varied, with privately sponsored refugees tending to earn more than those entering as government-assisted refugees or through the In-Canada Asylum Program. After controlling for observable characteristics, the study shows that the program of entry has a larger impact on earnings in the early years, with privately sponsored refugees earning more than government-assisted in their first year in Canada. However, in the long run the advantage of one program over another is diminished. With more years in Canada, the differences in observable characteristics accounted for a larger portion of the earnings gap between entry groups.
Overall, differences in human capital, economic and source country characteristics accounted for a very small portion of the difference in earnings. These differences may be related to other factors that are unaccounted for in this study, such as the perceived or actual differences in refugee education and labour market experience in the source country, cultural factors, or discrimination, as well as post-arrival experiences (work experience, acquiring language skills, community support).
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