Immigration policy and immigrant quality: empirical evidence from Canada

This paper examines the earnings of foreign-born and native-born men in an attempt to evaluate whether the decline in the quality of Canadian immigrants is related to changes in the country-of-origin mix and the class (type) mix of immigrants. Based on a human capital interpretation, higher quality immigrants are defined as immigrants who have smaller on-entry earnings differentials and have earnings that grow at a faster rate (relative to native-born Canadians). The analysis consists of two parts. The first part is based on individual data on earnings and socio-economic characteristics collected in the 1971 and 1986 Canadian Censuses. Earnings equations are estimated for 16 country-of-origin immigrant groups. These regressions are then used to construct a cohort-specific measure of immigrant quality based on the earnings differential between foreign-born and native-born Canadians. In the second part of the analysis, additional regression equations are estimated, pertaining to the period 1968 to 1985, that relate these Census-based measures of immigrant quality to the country-of-origin and class mix of immigrants. In this analysis, unpublished data, supplied by theDepartment of Employment and Immigration, describing the distribution of immigrants across the three main immigrant classes is used. Overall, the analysis confirms that there has been a sharp secular decline in the quality of Canadian immigrants and suggests that it is related to changes in both the country-of-origin and class mix of immigrants.Earlier versions of this paper were presented at the meetings of the Canadian Economics Association and the European Society for Population Economics. The comments of Martin Browning, John Ermisch and two anonymous referees are gratefully acknowledged. Of course, all remaining errors and shortcomings are the sole responsibility of the authors.