New Canadians Working amid a New Normal: Recent Immigrant Wage Penalties in Canada during the COVID-19 Pandemic

Abstract

The global COVID-19 pandemic has exposed and arguably intensified many existing inequalities. The present analysis explores the relationship between recent immigrant earnings and the pandemic. Specifically, we attempt to empirically answer the question: Has the COVID-19 pandemic exacerbated (mitigated) recent immigrant-non-immigrant employment and wage gaps? We find that the pandemic did not change the labour force activity profile of recent nor long-term immigrants. Furthermore, the pandemic did not disproportionately disadvantage recent immigrants’ earnings. In fact, recent immigrant males who were employed during the COVID-19 crisis experienced a small, but statistically significant earnings premium. This was insufficient, however, to overcome the overall earnings discount associated with being a recent immigrant. Furthermore, we find that the recent immigrant COVID-19 earnings ‘boost’ is only observable at and below the median of the earnings distribution. We also employ Heckman selection correction to attempt to adjust for unobserved sample selection into employment during the pandemic. The fact that COVID-19 has not worsened recent immigrant earnings gaps should not overshadow the large recent immigrant earnings disparities that existed prior to the pandemic and continue to exist regardless of the COVID-19 crisis.

How Do the Labour Force Characteristics Encounter COVID-19 Economic Consequences—A Canadian Experience

“…Accordingly, the workers in the bottom quartile of weekly earnings comprised more than one-half of job losses, and workers paid hourly (as opposed to salaried), younger workers and non-union workers lost the most work. Furthermore, as Lamb et al (2022) states, the labour market realities facing many recent immigrants before the pandemic were already quite precarious.…”

Employment Barriers for Racialized Immigrants: A Review of Economic and Social Integration Support and Gaps in Edmonton, Alberta

“…Research has found that the COVID-19 pandemic compounded existing inequalities in the Canadian labour market. For example, Hou et al (2020) found that racialized individuals suffered greater financial insecurity (compared to the White population) because they were more likely to have precarious and lower-paying jobs, experience job loss or decreased hours of employment (see also, Mo et al 2020). Lamb et al (2022 found that recent immigrants were more likely than Canadian-born workers to be unemployed, irrespective of the pandemic (p. 71).…”