Study: Over-education among university-educated immigrants in Canada and the United States
Canada and the United States are two major immigrant destinations with distinct selection policies and economic structures. Relative to the size of the national population, annual permanent migration to Canada was more than double the annual permanent migration to the United States over the last two decades. Compared with the United States, Canada's industrial structure is less knowledge-intensive and has a weaker demand for university-educated workers.
Furthermore, university-educated immigrants in the United States were generally selected and sponsored by employers. Until the early 2010s, university-educated immigrants in Canada were mostly admitted directly from abroad through the points system. This system selects immigrants based primarily on their human capital characteristics, including education, language, age and work experience. The differences in supply–demand balance and how new immigrants are selected could affect immigrants' relative performance in the labour market in the two countries.
A new Statistics Canada study compares Canada and the United States in the over-education rates among recent immigrant, long-term immigrant, and domestic-born workers with a bachelor's degree or higher. Over-education in this study refers to situations where workers with at least a bachelor's degree hold a job that requires only a high school diploma or less. Over-education leads to inefficient use of human capital and lost productivity.
The study found that recent immigrants in Canada with a bachelor's degree or higher were more likely to be over-educated for their jobs than their counterparts in the United States. Among domestic-born workers, however, the over-education rate was slightly lower in Canada than in the United States.
Based on educational requirements specified in the National Occupational Classification, 35% of recent immigrants (arrived within the last 10 years) with at least a bachelor's degree and aged 25 to 64 in 2016 were over-educated for their jobs in Canada, compared with 21% of those in the United States. This gap was little changed when differences in socio-demographic characteristics among recent immigrants in the two countries were taken into consideration.
Among recent economic immigrants admitted through different selection programs, those admitted under the Canadian Experience Class (CEC) had the lowest over-education rate (18%)—even lower than the rate among recent immigrants in the United States. The CEC, introduced in 2008, resembles employer-selection in the United States. CEC immigrants arrive as temporary foreign workers and can apply for permanent residence after having acquired at least one year of skilled work experience in Canada.
Furthermore, for immigrants in Canada relative to their counterparts in the United States, the disadvantage of over-education was smaller for long-term immigrants who arrived 10 years ago. Their over-education rate was 21% in Canada and 18% in the United States. This suggests that recent immigrants to Canada transition out of over-education faster than their US counterparts.
Among domestic-born workers with at least a bachelor's degree, the over-education rate was 13% in Canada and 15% in the United States.
The research paper "Over-education Among University-educated Immigrants in Canada and the United States," part of the Analytical Studies Branch Research Paper Series, is now available.
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