Prejudice, Profit, or Productivity: Explaining Returns to Human Capital among Male Immigrants to Canada. (1)

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This paper compares the occupational and earnings attainments of male immigrants to Canada to those of native-born men to test explanations based on prejudice/discrimination, competitive market, and national origin-related productivity theories using data from the Public Use Microdata File of the 1991 Census of Canada. Although there is no indication that the returns to human capital among immigrants educated in Canada are any less than those received by the native-born majority, I do find that immigrants educated abroad receive lower returns to education in the form of both occupational status and earnings than the native born, as well as no returns to foreign labour market experience. A macro-level model could detect no effect of a measure of prejudice on the level of returns in the form of status points or earnings. I did, however, find a substantial effect of level of development of country of origin on earnings returns to postsecondary education among immigrants educated abroad.

Dans cette communication l'auteur confronte les realisations professionnelles et de gains des immigrants masculins canadiens avec ceux des hommes de souche canadienne afin d'examiner les explications axees sur le prejuge et la discrimination, le marche concurrentiel et le rendement national selon l'origin du travailleur. Pour faire ceci il a eu recours aux donnees publiees dans les Fichiers de microdonnees a grande diffusion, Recensement du Canada, 1991. Quoiqu'il n'y aie pas de signe que le rendement au capital humain pour les immigrants formes au Canada est moins que celui pour les canadiens majoritaires de souche, l'auteur constate que les immigrants formes a l'etranger, quand ils obtiennent la meme annee de scolarite, sont moins recompenses en gains et statut professionnel par rapport a leurs homologues de souche canadienne. De plus, ces-premiers ne profitent pas de leur experience dans le marche etranger du travail. Un modele concu sur le microplan n'a pas decele un effet issu d'une mesure du prejuge sur la quantite du rendement en forme des gains et des points de statut. Neanmoins, l'auteur a bien constate un effet substantiel issu du niveau de developpement du pays d'origine en fonction de gains relatifs a l'education post-secondaire obtenue par les immigrants formes a l'etranger.

As a nation founded by immigrants, Canada has continued to welcome newcomers in substantial numbers, and is, along with Australia, Israel, and the United States, one of the main immigrant-receiving nations of the world. As of the 1996 Census, 17.4% of Canada's population was born in another country, the largest percentage in more than fifty years. Are the opportunities afforded these immigrants in Canada's labour market equivalent to the opportunities of the Canadian-born, given equivalent human capital endowments? Or are the foreign-born relegated systematically to lower levels of the occupational structure and earnings distribution than would be warranted by their training and experience? The term 'discrimination' is normally applied by sociologists to this situation, though it is conceptually complex and notoriously difficult to measure (Evans and Kelley, 1991). In contrast, economists studying the phenomenon allude to discrimination only as a last recourse. (2) Instead, most favour either a neoclassical p osition that assumes that "rational" employers will not practice discrimination because it means that they must forego hiring cheaper minority workers and hence reduce their profits, or introduce additional variables to explain earnings differences between immigrant and native-born workers, such as changes in country of origin composition overtime, the self-selection of immigrants, or country differences in immigration policy (Borjas, 1994).

Theories of Ethnic Inequality


Sociologists have typically assumed that, in the labour market, ethnic or racial prejudice on the part of employers, and sometimes workers, has produced discriminatory behaviour that restricts the opportunities of members of minority groups that are its object (see Evans and Kelley, 1991). …