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This paper begins by reviewing the recent literature on the labour market benefits of citizenship acquisition among immigrants to Canada and the United States. Cross-sectional data from 2006 suggest that, after one has accounted for differences in years since immigration, as well as for personal and job-related characteristics, immigrants who are citizens have higher employment rates and lower unemployment rates, are more likely to be in higher-status occupations, and have higher earnings than their counterparts who are not citizens. But does citizenship acquisition lead to better employment outcomes? This question is better addressed with longitudinal data. One U.S. study using such data concluded that becoming a citizen did contribute to higher wages. No such longitudinal data exist in Canada.

If acquiring citizenship is one means of improving labour market outcomes, then it is important to identify the determinants of citizenship. Among immigrants who meet eligibility requirements, citizenship acquisition is associated with personal and source country characteristics. The likelihood of becoming a citizen varies among immigrants as a result of their educational attainment, years since immigration, age at immigration, and language skills. Furthermore, source region characteristics matter. Immigrants from countries with lower gross domestic product per capita and from countries with restricted civil liberties are more likely to become citizens of Canada or the United States. Immigrants from a country in close geographical proximity (e.g., Mexico to the United States) are less likely to become citizens. Overall, the research suggests that personal characteristics generally affect the probability of citizenship acquisition more than source country characteristics.

In 1970, citizenship rates were similar in Canada and the United States, at around 68%. By 2006, the percentage had declined to 46% in the United States and risen to 79% in Canada, resulting in a 33-percentage-point gap between the two countries. Some of the decline in the United States was likely associated with a rising number of unauthorized immigrants, who are not eligible for citizenship. However, even after one has accounted for this, it is found that the citizenship rate still declined significantly in the United States, particularly between 1970 and 1990.

This paper examines the extent to which the widening gap in citizenship rates in Canada and the United States is associated with changes in the individual characteristics and source regions of immigrants to the two countries. The analysis uses microdata from the Census of Canada, the U.S. Census, and the American Community Survey.

Through the 1970s, when the gap widened most, this study finds that changes in the characteristics of immigrants to Canada and the United States accounted for roughly 65% of the increase. Through the 1980s, changes in immigrant characteristics accounted for about 50% of the increase. Over the 1990-to-2006 period, the citizenship rate changed little in the United States, and the continued rise in Canada was related mostly to changes in immigrant composition. Finally, over the entire period, from the early 1970s to 2006, changes in the characteristics of immigrants to the two countries accounted for 48% to 62% of the increase in the gap in citizenship rates among immigrants. For the most part, the citizenship rates in the two countries moved in directions one would expect, given the changes in the personal characteristics and the source countries of the immigrants residing in each country.

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