Abstract
While destination-country education provides many potential advantages for immigrants, empirical studies in Australia, Canada and the USA have produced mixed results on the labour outcomes of immigrants who are former international students. This study uses large national longitudinal datasets to examine cross-cohort trends and within-cohort changes in earnings among three groups of young university graduates: immigrants who are former international students in Canada (Canadian-educated immigrants), foreign-educated immigrants who had a university degree before immigrating to Canada and the Canadian-born population. The results show that Canadian-educated immigrants on average had much lower earnings than the Canadian-born population but higher earnings than foreign-educated immigrants both in the short run and in the long run. However, Canadian-educated immigrants are a highly heterogeneous group, and the key factor differentiating their post-immigration earnings from the earnings of the Canadian-born population and foreign-educated immigrants is whether they held a well-paid job in Canada before becoming permanent residents. Furthermore, an extra year of Canadian work experience or an extra year of Canadian education experience before immigration added only a small or no earnings gain after immigration for Canadian-educated immigrants.JEL Classification: J15, J24, J61
Highlights
The number of international students pursuing education in countries with advanced economies has been rising rapidly over recent decades
According to statistics for four English-speaking developed countries compiled by the United Nations Educational, Scientific and Cultural Organization (UNESCO), international students participating in tertiary education increased from 451,900 in 1999 to 784,000 in 2013 in the USA, from 232,500 to 416,700 in the UK, from 117,500 to 249,900 in Australia and from 32,500 to 135,200 (2012 statistics) in Canada
Do university-educated CE immigrants earn as much as Canadian-born university graduates both in the initial years after immigration and in the long term, and, if there is a large earnings gap between the two groups, what are the possible determinants? Second, do CE immigrants have a large earnings advantage over FE immigrants in the short and long run, and if they do, what are the possible determinants? The results suggest that the key factor differentiating the post-immigration earnings of CE immigrants from the earnings of the Canadian-born population and FE immigrants is whether international students held a well-paid job in Canada before becoming permanent residents
Summary
The number of international students pursuing education in countries with advanced economies has been rising rapidly over recent decades. A third mechanism is acculturation (Tong 2010; Zeng and Xie 2004) Because they arrive younger and spend more years in Canada than foreign-educated immigrants, international students would gain better knowledge about the labour market and have more opportunities to establish social networks that could help their job search. A few studies from Australia, Canada and the USA show that the earnings advantage of former international students over other economic immigrants is either small or non-existent (Birrell et al 2006; Hou and Bonikowska 2016; Lowell and Avato 2014) These findings have supported recent changes in immigrant selection policies in Australia and Canada.
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