1996/97 PCERII Funded Research Abstract

Research Title: Earning Opportunities of Immigrants: An Analysis of Urban Scale, Industrial Structure, and Enclave Economy on Income Disparity

Research Team: Dr. Peter Li (University of Saskatchewan) - Principal Investigator

Research Domain(s): Economic

From the vantage point of public policy, the main question of economic integration of immigrants has to do with how immigrants become a part of the local economy in their community of residence, and how the social and economic features of the local economy affect the earning outcome of immigrants relative to others. Thus, earnings of immigrants can be seen as an outcome of their participation in the Canadian economy, and the magnitude of their earnings, relative to that of non-immigrants of similar educational levels and other social and economic opportunities for immigrants.

The literature on earnings of immigrants in Canada indicates that immigrants have gross earnings that are similar to or higher than non-immigrants, but after differences in education and other variables have been accounted for, immigrants in fact earn less than non-immigrants. Net income disparity between immigrant and non-immigrants can be seen as an indication of differential opportunities, since immigrants with similar qualifications and characteristics as non-immigrants would earn as much as non-immigrants if the opportunity is the same for both groups. Hence, variations in earning disparities in different communities reflect the degree of differential opportunities for immigrants.

This research attempts to examine how residual income differentials, after controlling for individual characteristics, can be accounted for by structural arrangements pertaining to the size of urban scale, characteristics of industrial structure of cities, and presence or absence of immigrant enclave economy. The objective of the study is to determine whether larger urban scale, more differentiated industrial distribution and the presence of immigrant enclave economy provide a better earning opportunity for immigrants as compared to the earnings of non-immigrants.

The study makes use of the Public Use Microdata File on Individuals from the 1991 Census of Canada to estimate the effect of urban structural arrangements on earning disparities. The basic comparative groups are: visible minority immigrants, white immigrants, native-born visible minorities, and native-born white Canadians. In addition, further comparative groups will be constructed by introducing gender and self-employment as variables. The research strategy is to see how intergroup differences in earnings increase or decrease depending upon the size of the city immigrants are residing, the type of industrial sector immigrants work, and the degree of presence of immigrant enclaves.

In terms of policy implications, the ability to identify the conditions under which earning disparities can be minimized means that future policies of incorporating immigrants can take into account urban scale, industrial characteristics and other relevant social features to assist the integration of immigrants into Canadian cities.