Occupational Attainment And The Earnings Of Native-Born And Foreign-Born Canadians

Abstract

The economic performance of immigrants has been studied primarily in terms of entry earnings and how these earnings evolve over time in the host country. The empirical analysis typically revolves around variants of an earnings function, which relates worker earnings to human capital and other individual characteristics. In this literature, the effects of occupational attainment on earnings are typically not modelled mainly because occupation is perceived as just another way of looking at earnings. However, as noted by Chiswick and Miller (2008), amongst others, occupation is the channel through which an individual’s human capital translates into earnings. That is, education has both a direct impact on earnings and an indirect one operating through occupational status. Empirical findings for the US and Australia provide support for this view. Our objective in this paper is to extend this analysis to Canada, to assess how the earnings gains from human capital depend upon occupational status for both native-born and immigrant workers, and upon the length of residence of the latter in Canada. This will also shed light on the relative importance of the intra-occupational vis-a-vis inter-occupational mobility of immigrants in realizing earnings gains from education, in the short and longer term. The paper assesses these issues by looking at data drawn from the 2001 Canadian census.