Adjusting for Human Capital Quality Differences in the Immigrant Wage Gap in Quebec and the Rest of Canada

Abstract

In this article, I employ the Blinder-Oaxaca decomposition method to study the immigrant wage gaps in Quebec and the rest of Canada. In similar manner to Coulombe, Grenier and Nadeau(2012), I include an additional wrinkle to the model in that I control for human capital quality amongst immigrants using relative GDP per capita as an index of human capital quality. The findings indicate that accounting for human capital quality differences does not explain a significant portion of the difference in the wage between Quebec and the rest of Canada. The majority of the difference still lies in the unexplained component of the gap, specifically the constant component of the unexplained gap. This suggests that there may still be variables omitted from the model that explains a larger portion of the wage gap difference between the two regions.