Sociology 339F Immigration and Employment http:www'utoronto'caethnicstudiesSOC339'html

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Sociology 339FImmigration and Employmenthttp//
www.utoronto.ca/ethnicstudies/SOC339.html

• Instructor Prof. Jeffrey G. Reitz
• Department of Sociology
• Ethnic, Immigration and Pluralism Studies
• Munk Centre for International Studies
• University of Toronto
• Fall, 2007

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Sociology 339FImmigration and EmploymentSession
3 September 25Immigrant Human Capitaland
Skill Under-utilizaation

• Readings
• Jeffrey G. Reitz, 2001. Immigrant Skill
  Utilization in the Canadian Labour Market
  Implications of Human Capital Research," Journal
  of International Migration and Integration,
  2(3)347-378.
• Peter S. Li, 2001. "The market worth of
  immigrants' educational credentials." Canadian
  Public Policy, 27(1)23-38.

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Todays Agenda

• Extent and Impact of Immigrant Skill
  Underutilization
• Skill Assessment Processes and Immigrants
• Labour Market Sectors Affected
• Cross-national Transferability of Types of Skills

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1. Extent and Impact of Immigrant Skill
Underutilization

• Definition of skill under-utilization when
  immigrants work at skill levels below the level
  at which comparably qualified native-born workers
  normally work
• One aspect of discrimination based on immigrant
  origins
• Includes non-recognition of qualifications as
  one aspect

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Skills Not Recognized

• Professional or Trade Credentials by Licensing
  Bodies
• Professional or Trade Credentials by Employers,
  for Immigrants with Canadian Licenses.
• Non-licensed Occupational Credentials
• Skills Deemed Relevant to the Ability to Perform
  a Job, Though Not Specifically Credentialized
• General Education
• Experience
• General Abilities

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Measurement of Extent

• Labour market survey analysis of earnings, using
  Statistics Canada skill levels
• Immigrant Skill Utilization in the Canadian
  Labour Market Implications of Human Capital
  Research, 2001
• Survey of perceptions of skills not used
• Watt, D., M. Bloom. Exploring the Learning
  Recognition Gap in Canada. Phase 1 Report.
  Recognizing Learning The Economic Cost of Not
  Recognizing Learning and Learning Credentials in
  Canada. Ottawa Conference Board of Canada, 2001.

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Determinants of Immigrant Employment Success

• Individual Characteristics of Immigrants
• Selection and settlement, outmigration, illegal
  migration
• Human capital
• Origins
• Social and cultural capital
• Treatment of Immigrants within Institutions
• Discrimination
• Assessment of Qualifications
• Structure of Institutions
• Labour markets, e.g. union strength
• Other institutions, e.g. educational institutions

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Human Capital Theory

• Employers and employees both assess and act on
  interests in relation to productive skills of
  employees (human capital)
• Employers pay a premium for additional skills in
  relation to their impact on productivity
• Employees invest in skills for earnings premium
  in relation to costs of acquiring skills
  (education costs, costs of delayed labour market
  entry)
• Equilibrium is slope of relation between
  education and earnings
• Persons with more human capital have more labor
  market success
• 1 year of education ? 5-7
• University degree ? 20-25
• 1 year of work experience ? 3-6

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b
Y b1Ed b2Un b3Ex b4Ex2 b5T b6M
b7V Where Y Annual earnings Ed Years of
education Un University Degree (1,0) Ex
Years of work experience T,M,V residence in
Toronto, Montreal, Vancouver respectively (1,)
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Evidence for Human Capital and Immigration

• Persons with more human capital have more labor
  market success
• 1 year of education ? 5-7
• University degree ? 20-25
• 1 year of work experience ? 3-6
• Applies to immigrants, though somewhat less so
• 1 year of education ? 2-4, about half
• University degree ? 20-25 -- Sheepskin effect
• 1 year of work experience ? nil

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Findings of Human Capital Research

• Finding No. 1 Immigrants receive a smaller
  earnings premium for formal education, compared
  to the native-born (net of other variables),
• Finding No. 2 Immigrants receive a smaller
  earnings premium for work experience, compared to
  the native-born (net of other variables), and
• Finding No. 3 Immigrants from particular
  origins groups receive lower earnings than
  immigrants from other origins groups (net of
  other variables).

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Reasons for Lower Earnings

• transferability, skill relevance or quality
  differences in the specific substance of
  educational or work experiences, which may affect
  their relevance to the Canadian workplace,
• skill utilization differences in the skill
  requirements of the occupations in which
  immigrants are employed (assuming equal skill
  quality), and
• pay equity differences in pay for
  equally-skilled work (assuming equal skill
  quality and occupational skill level).

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Reasons how to measure?

• Lower earnings at same skill level (about 15b)
• Skill underutilization unequal pay because of
  working in less skilled occupations (2.4b)
• Pay inequity unequal pay in occupations at same
  skill level (with occupation controlled, 12.6b)
• skill transferability?
• guestimate

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2.4 billion?

• Difference between value of work capability and
  value of work actually done
• Does not take account of transferability issue
• Far less than unequal pay within occupational
  skill levels

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Survey of perceptions of skills not used

• Watt, D., M. Bloom. Exploring the Learning
  Recognition Gap in Canada. Phase 1 Report.
  Recognizing Learning The Economic Cost of Not
  Recognizing Learning and Learning Credentials in
  Canada. Ottawa Conference Board of Canada,
  2001.
• Includes immigrants and native-born
• Estimate based on perceptions of skills not used,
  earnings in corresponding occupations about 3b

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Ontario Survey of Licensed Professional Immigrants

• Goldberg, M. (2000). The Facts are In!
  Newcomers Experiences in Accessing Regulated
  Professions in Ontario. Ontario Ministry of
  Training, Colleges and Universities, Access to
  Professions and Trades Unit.
• N643 immigrants trained and expecting to work in
  licensed professions, arriving from 1994,
  surveyed in 1998-9

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Many immigrants receive no information before
arrival
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Self-assessed language skills
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High unemployment and underemployment
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2. Skill Assessment Processes and Immigrants

• Assumption of human capital theory easy
  acquisition of knowledge about
• skills reflected in specific degrees
• performance of job candidate in acquiring skills
• performance of others with skills in comparable
  work situations
• Immigrants lack access to this form of social
  capital
• invisible degrees
• no references
• no previous record of job performance of person
  with degree

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3. Labour Market Sectors Affected

• Licensed Professions and Trades
• Non-licensed occupations requiring post-secondary
  credentials
• semi-professions
• administrative
• sales and clerical
• Other occupations (normally requiring high school
  or less)
• taxi, truck driver
• security guard, caretaker
• restaurant worker

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Knowledge occupations

• Professions
• Highest skill requirements, most elaborate and
  highly bureaucratized procedures for
  qualification assessment
• Census categories Science and engineering,
  social science, health, education (Skill Level
  IV)
• Management
• High skill requirements for senior management in
  knowledge-based industries (SL IV)
• But some less-codified qualifications
  leadership, judgment
• Census categories Health, Education, Business
  Services, etc.
• Not Trade, Construction, Personal Services, etc.
• Outside knowledge occupations
• Higher educational qualifications required in
  many, but specific requirements less codified

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Increase in size of knowledge occupations,
men(professions more than management)
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Increase in size of knowledge occupations,
women(both professions and management)
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Education standards rise within occupations,
men(but more outside knowledge occupations)
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Education standards rise within occupations,
women(but more outside knowledge occupations
almost as much as for men)
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Immigrant men proportion in knowledge
occupationsdeclines relative to native-born,
1981 1996
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Immigrant men access to knowledge
occupationspercent difference with native-born,
1981 1996by educational levels
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Immigrant women access to knowledge
occupationspercent difference with native-born,
1981 - 1996
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Immigrant women access to knowledge
occupationspercent difference with native-born,
1981 1996by educational levels
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Knowledge occupation access, 1996

• Immigrants much less represented in knowledge
  occupations
• Lower representation for immigrants with
  university education
• Black, South Asian, and Filipino origins further
  under-represented relative to education at all
  levels

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Immigrant access to Professions and Management
Men Women
Source 1996 census of Canada
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Earnings implications, 1996

• For men
• Immigrant earnings 30 40 less for those with
  university degrees
• Only partly due to lack of access to knowledge
  occupations (5)
• Greater proportional earnings losses outside
  knowledge occupations than within
• For women
• Similar but greater earnings losses also in
  knowledge occupations

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Net Discounting in Earnings for Men
Women
Source 1996 census of Canada
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Trend analysis, 1981 - 1996

• Access to knowledge occupations declining even
  relative to qualifications
• Low and declining access to knowledge occupations
  produces part of decline in earnings
• Decline in earnings also caused by discounting of
  immigrant skills outside of knowledge occupations

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Relative Immigrant Earnings Premiumsfor BA
Education, Men, 1981 - 1996
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Relative Immigrant Earnings Premiumsfor
Post-Graduate Education, Men, 1981 - 1996
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Relative Immigrant Earnings Premiumsfor BA
Education, Women, 1981 - 1996
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Relative Immigrant Earnings Premiumsfor
Post-Graduate Education, Women, 1981 - 1996
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4. Cross-national Transferability of Types of
Skills

• People v. Technical Skills
• Management Skills
• Cultural Intelligence

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Issues

• Why keep selecting on the basis of skills?
• Can skill utilization improve?
• What can government do?

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Sociology 339FImmigration and EmploymentNext
Week Session 4 October 2Racial Discrimination

• Readings
• Jeffrey G. Reitz and Raymond Breton, Prejudice
  and Discrimination in Canada and the United
  States A Comparison, pp. 47-68 in Racism and
  Social Inequality in Canada, edited by V.
  Satzewich, Toronto Thompson Educational
  Publishing, 1998.
• Victoria M. Esses, Joerg Dietz, Arjun Bhardwaj,
  2006. "The role of prejudice in the discounting
  of immigrant skills." Pp. 113-130 in R.
  Mahalingam (Ed.), The cultural psychology of
  immigrants. Mahwah, NJ Erlbaum.