Do Immigrant Nurses in Canada See a Wage Penalty? an Empirical Study

By Buhr, Karen J. | Business Economics, July 2010 | Go to article overview

Do Immigrant Nurses in Canada See a Wage Penalty? an Empirical Study


Buhr, Karen J., Business Economics


The purpose of this study is to analyse the labour market for female immigrant nurses in Canada and to address the following question: does a nurse with foreign educational credentials have the same earning potential compared with a nurse who was educated in Canada? This is part of a more general question on economic discrimination against immigrants. Using data from the confidential master files of the 2001 Canadian Census on Individuals, this study finds that nurses educated outside of Canada do face wage penalties. This indicates that their credentials might not be fully recognized and/or valued in the Canadian labour market for registered nurses. This result is important to the business world since it suggests the possibility of a general finding that immigrant credentials may not be readily transferable and compensated in a new country. This can result in qualified workers not being able to gain meaningful employment and this source of labour might not be adequately used to fill jobs in industries facing labour shortages.

Business Economics (2010) 45, 210-223.

Keywords: immigrant wages, nurses, economic discrimination

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The issue of whether immigrants face wage penalties compared with domestically trained workers is an important one for many industries since it bears directly on the ability of firms and governments to attract qualified workers to positions in which there are shortages.

The purpose of this paper is to analyse the labour market for immigrant nurses in Canada and examine if there is an earnings penalty associated with being a foreign born and educated nurse. If there is a difference in the recognition or market valuation of educational credentials for nurses trained in Canada and in other countries, then it is hypothesized that individuals with foreign nursing degrees will attain lower earnings than those with a Canadian nursing degree. If the educational credentials are equivalent, then there should be no wage differential seen between a Canadian and a foreign nursing degree. This study adds to the literature, as this is a question that is not really answered for this specific occupation in Canada or the United States. Considering that there are currently nursing shortages in both Canada and the United States and that there are large numbers of immigrant nurses to both countries, examining the employment outcomes for this specific group of workers is important. If educational credentials of immigrant nurses and other workers are not readily transferrable to the labour markets in Canada or the United States, perhaps policy can be implemented to assist these workers to attain the credentials needed to become employed in their new country.

The health care professions in Canada and the United States make up a significant part of the economy. In times when health care reform is being debated and escalating health care costs are frequently a concern to government, examination of health human resources can have important implications. The question of educational credentials among health care workers is important. Canada and the United Stated have both experienced increases in the number of immigrants over recent years. These individuals bring with them their skills, education, and experience. However, in many cases they have difficulties in gaining employment in their chosen fields. This is important to the business world since this can result in qualified workers not being adequately used to fill jobs in industries facing labour shortages. On the other hand, barriers to employment may also be important in preventing those with insufficient or inadequate education from gaining employment and potentially resulting in negative outcomes.

Educational credential recognition is an important determinant of the occupations held by people with nursing training. In Canada, nursing is a regulated profession, meaning that no one can practice the profession without a valid Canadian license. …

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