Are Immigrant Earnings Affected By The Size Of Their Employer?

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Link: http://www.yorku.ca/tiedi/doc/AnalyticalReport3.pdf
By: Tony Fang, Nina Damsbaek, Philip Kelly, Maryse Lemoine, Lucia Lo, Valerie Preston, John Shields, Steven Tufts
Org: Toronto Immigrant Employment Data Initiative (TIEDI)
Date: 2010

This report seeks to answer the question: What are the labour market outcomes - in this case, defined by earnings - for immigrants, according to the number of employees in their workplace?

Background

When looking at immigrants, limited human capital, especially skills in English, recognised educational credentials, and work experience, can limit the employment opportunities available. Another factor may be the "need for immediate income". This can sometimes result in a reliance on the ethnic economy - which can also limit opportunities.

Ethnic economies generally comprise small enterprises, largely catering to the immigrant community, in which the "mobilization of family, ethnic and social ties within the immigrant community is a fundamental aspect". The smaller firm sizes (sometimes of family orientation) of most businesses in the ethnic economy limit career mobility and therefore wages. Evidence from Denmark suggests that "most immigrant businesses (...) are tiny self-employment units in which profits are low" and yet immigrants find employment in these businesses "more than the majority population".

Findings and Conclusions

  • Hourly wages are relative to firm size: Canadian-born and immigrants working in large firms earn higher hourly wages;
  • Immigrants earn similar hourly wages to Canadian-born across firm size. In some case,
  • immigrants even earn higher wages than Canadian-born. Recent immigrants however earn consistently lower hourly wages, especially those who immigrated between 1991 and 2000.
  • Immigrants who arrived in the 1990s earn lower hourly wages than more recent immigrants, possibly due to the difficult labour market (recession) when they immigrated;
  • Canadian-born and immigrant women earn less than their male counterparts, regardless of firm size;
  • Contrary to expectations in some of the existing literature, immigrants do not appear to be over-represented in small firms.