The Performance of Immigrants in the Canadian Labor Market

TLDR

The study examines economic assimilation of immigrants to Canada. The authors test the assimilation process using a cohort fixed‑effect model and find it not overidentified. Immigrant labor‑market outcomes become increasingly dispersed over time, with permanent cohort differences and generally low or negative assimilation rates.

Abstract

In this article we examine the economic assimilation of immigrants to Canada. We provide new evidence on immigrants who arrived in the 1970s and document an increase in the dispersion of labor market outcomes across immigrants of different vintages over time. Our results confirm U.S. evidence of "permanent" differences across immigrant cohorts. What distinguishes the Canadian experience is small or negative rates of assimilation for most cohorts over the sample period. Finally, we test the overidentification of the assimilation process specified in previous studies and fail to reject the usual cohort fixed-effect specification.