The Shift in Canadian Immigration Composition and its Effect on Wages

We document recent changes in Canadian immigration, marked by an increasing prevalence of temporary residency. Using microdata from Statistics Canada's Labour Force Survey, we show that temporary workers' characteristics and nominal wages have diverged from those of Canadian-born workers. Between 2015 and 2024, temporary workers have become younger, less experienced and more likely to migrate from lower-income countries. As well, the shares of temporary workers in skilled occupations have declined moderately. Throughout this period, the average nominal wage gap between temporary and Canadian-born workers has more than doubled, widening from -9.5% to -22.6%. Further, we estimate Mincer regressions to assess how these evolving characteristics have contributed to the growing wage gap. Our findings show that this increase can be explained by observable characteristics. Our results suggest that aggregate nominal wages would have been, on average, 0.7% higher in 2023–24 had the characteristics of temporary workers remained unchanged over the past decade.

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Publication Details

Journal
Econstor (Econstor)
Published
2025-05-09
DOI
https://doi.org/10.34989/sdp-2025-8
Primary Topic
Migration and Labor Dynamics
Type
article
Field-Weighted Citation Impact
0.00
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article

The Shift in Canadian Immigration Composition and its Effect on Wages

Econstor (Econstor)
Migration and Labor Dynamics
article

The Shift in Canadian Immigration Composition and its Effect on Wages

article en

Abstract

We document recent changes in Canadian immigration, marked by an increasing prevalence of temporary residency. Using microdata from Statistics Canada's Labour Force Survey, we show that temporary workers' characteristics and nominal wages have diverged from those of Canadian-born workers. Between 2015 and 2024, temporary workers have become younger, less experienced and more likely to migrate from lower-income countries. As well, the shares of temporary workers in skilled occupations have declined moderately. Throughout this period, the average nominal wage gap between temporary and Canadian-born workers has more than doubled, widening from -9.5% to -22.6%. Further, we estimate Mincer regressions to assess how these evolving characteristics have contributed to the growing wage gap. Our findings show that this increase can be explained by observable characteristics. Our results suggest that aggregate nominal wages would have been, on average, 0.7% higher in 2023–24 had the characteristics of temporary workers remained unchanged over the past decade.

Econstor (Econstor)
Bank of Canada (CA)
Decent work and economic growth
Openalex Percentile: Top 49%
Migration and Labor Dynamics
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The Shift in Canadian Immigration Composition and its Effect on Wages · Econstor (Econstor) (2025) | TGRS Research Map | TGRS