A paper published in the Journal of International Migration and Integration says landing a good-paying job in Canada as a temporary foreign worker before immigrating to the country often means a higher income for immigrants once they get their permanent residency.
Researchers Garnett Picot and Feng Hou noted this connection and discussed it in their paper, The Effect of Pre‑immigration Canadian Work Experience on the Returns to Human Capital Among Immigrants, which was published March 10.
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“This study finds that among economic principal applicants who were admitted to Canada from 2000 to 2015, the economic returns to both education and foreign work experience were significantly higher for economic immigrants with high pre-immigration Canadian earnings than for those with low pre-immigration Canadian earnings – and, in particular, those with no pre-immigration Canadian work experience.
Growth Of Two-Step Immigration Process Has Upped Immigrants’ Incomes
“This result was observed after controlling for sociodemographic characteristics, and held in the short, medium and long run after landing. The result also held among economic immigrants from both developed Western countries and developing countries.”
Canada provides a two-step immigrant selection process which has become increasingly important in the last two decades.
“In the first step, Canadian employers play a major role in recruiting and evaluating foreign residents employed in the Canadian labour market on a temporary basis, which can include work permit holders in the Temporary Foreign Worker Program (TFWP), work permit holders in the International Mobility Program (IMP), international students with employment and other employed temporary residents,” note the researchers.
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In the second step, Immigration, Refugees and Citizenship Canada (IRCC) decides how many and which temporary foreign workers will be eligible for admission as permanent residents.
With Canada’s increasing use of this two-step process, the share of new immigrants having pre-immigration Canadian work experience has soared in the past few decades.
“In 2000, eight per cent of economic immigrants had pre-immigration Canadian earnings, increasing to 46 per cent in 2018. Among economic principal applicants, the share with pre-immigration Canadian earnings increased from 12 to 59 per cent,” note the researchers.
They attribute this growth in pre-immigration Canadian work experience to a shift towards Provincial Nominee Programs (PNP) and the Canadian Experience Class (CEC) programs which target temporary foreign workers and the increasing share of permanent residents who had previous Canadian earnings within different admission programs.
That two-step immigration system has been a boon for immigrants, allowing them to earn more money once they immigrate to Canada.
Immigrants’ Earnings Rose By 32% From 2000 To 2016
“Average first full-year earnings among economic immigrant men rose by 23 per cent between the 2000 and 2016 landing cohorts, and rose by 32 per cent among economic immigrant women,” note the researchers.
The boom in earning capacity, though, was not evenly distributed among all immigrants to Canada. In their paper, Picot and Hou reveal that 94 per cent of the higher incomes among immigrants went to those who had already commanded higher salaries in Canada prior to becoming permanent residents.
“The expanding number of immigrants who were previously temporary foreign workers with high earnings was more important than any other single factor in accounting for the improvement in immigrants’ initial earnings,” they note.
Those immigrants were also more likely to land jobs upon becoming permanent residents in Canada.
Foreign nationals who out-earn others by first landing higher-paying jobs as temporary foreign workers in Canada and then immigrating to the country and getting higher-paying jobs then might simply be those working in high-skilled jobs, the researchers suggest.
“An earlier study that examined the annual earnings of temporary foreign workers in different occupations concluded that higher annual earnings are highly correlated with being in a high-skilled occupation,” they note.
“The demand in the Canadian labour market is typically higher for higher-skilled than for lower-skilled workers (eg they have a much lower unemployment rate). As a result, among economic immigrants with pre-immigration Canadian work experience, employers may be more willing to recognize and compensate foreign work experience and education among higher-skilled workers than lower-skilled workers.”