When is a degree not a degree? Wage differences associated with foreign credential recognition for Canadian immigrants

Abstract

Do Canadian immigrants who require foreign credential recognition face significant wage penalties compared to similar immigrants who obtain their credentials in Canada? The following analysis employs a multiple regression model of immigrants’ wages to answer this question, within the broader context of economic and ethnic discrimination against immigrants. Using individual level microdata from the 2016 Canadian census, the results show that foreign credential recognition requirements do have significant negative impacts on wages for Canadian immigrants, particularly for those belonging to visible minority groups. The results are stratified by six fields of study (architecture and urban planning, education, engineering and geoscience, law, social work, and health care) and there are significant differences in wages between immigrants who studied in Canada and immigrants who studied abroad across all fields. The findings also indicate that women face larger wage penalties than men. These results show that immigrants’ foreign education is not valued as highly as Canadian education, suggesting that immigrants who are educated outside of Canada face discrimination or underemployment in Canada’s labour market. ‘Upskilling’ by obtaining additional education in Canada can, in most cases, remove the wage penalty for immigrants in the selected fields of study. However, the qualitative research on this subject indicates that few immigrants to Canada have the resources to pursue the additional education necessary to close this wage gap. The policy implications of this research suggest that services such as childcare, stipends, and language training can greatly benefit immigrants, particularly women, who are in the process of recertifying their foreign credentials in Canada.