Economic and Social Reports
Trends in education–occupation mismatch among recent immigrants with a bachelor’s degree or higher, 2001 to 2021
DOI: https://doi.org/10.25318/36280001202400500002-eng
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Selecting immigrants with high levels of education increases their chances of economic success. Immigrants with a bachelor’s degree or higher are more adaptable to changes in the labour market and have steeper growth in employment earnings than those with a trades or high school education (Picot, Hou, & Qiu, 2016). However, many immigrants with a bachelor’s degree or higher have occupations that underutilize their skills, which can reduce their employment income, productivity and well-being (Cornelissen & Turcotte, 2020).
From 2001 to 2016, the Canadian workforce with a bachelor’s degree or higher increased by 1.7 million people, but only half of these workers were absorbed into high-skilled occupations (i.e., jobs that required a bachelor’s degree or higher). This trend towards education–occupation mismatch among workers with a degree was concentrated among recent immigrants as younger Canadian-born people experienced a modest decrease in their mismatch rate over this period (Hou, Lu, & Schimmele, 2019).
As firms have adopted new technologies and automated tasks, the percentage of Canadians employed in managerial, professional and technical occupations has grown. The pace of this change in demand for high-skilled workers accelerated after 2018 (Frenette, 2023). Since the mid-2010s, the earnings gaps between immigrants and Canadian-born workers have narrowed, after widening from 2000 to 2015 (Crossman, Hou, & Picot, 2021). This improvement was likely because of stronger labour demand, as well as policy changes that better aligned the selection of immigrants with labour demand and other factors that increase their chances for economic success. These changes in labour demand may have improved the rate of education–occupation match among immigrants.
This article updates the trends in education–occupation mismatch documented by Hou, Lu and Schimmele (2019) with census data from 2001 to 2021. Education–occupation mismatch is defined based on the educational requirements for occupations in the National Occupational Classification (NOC).Note Occupations were classified as those that require a bachelor’s degree or higher (high-skilled occupations), some postsecondary education (medium-skilled occupations), or a high school education or less (low-skilled occupations).Note Workers with a bachelor’s degree or higher who are employed in low-skilled occupations are considered to be overeducated for their jobs, those employed in medium-skilled occupations are marginally overeducated and those employed in high-skilled occupations are education–occupation matched.Note
The study focuses on the outcomes of recent immigrants who have been permanent residents of Canada for 10 years or less in a given census year. The rate of education–occupation match of recent immigrants with a degree is an indicator of their long-term prospects for economic integration. In Canada, workers with a bachelor’s degree or higher who have low-skilled occupations early in their careers have increasingly lower chances of transitioning to high-skilled occupations over time (Chen & Fougère, 2014; Cornelissen & Turcotte, 2020).
Immigrants contributed much of the growth in the number of Canadians with a bachelor’s degree or higher from 2016 to 2021
From 2016 to 2021, the number of Canadians aged 25 to 64 years with a bachelor’s degree or higher increased from 5.2 million to 6.0 million people, continuing the long-term expansion of the population with a high level of educational attainment (Table 1). This occurred because of an increase in the percentage of Canadians with a degree, as well as population growth. Immigrants accounted for 60% of the growth of Canadians with a degree. Growth in the number of Canadians with a degree from 2016 to 2021 was higher among recent immigrants (+25%) and established immigrants (+28%) than among Canadian-born people aged 25 to 34 years (+11%) or those aged 35 to 64 years (+10%).
As in other census years since 2001, immigrants had a higher level of educational attainment than the Canadian-born population in 2021. About 55.3% of recent immigrants and 39.8% of established immigrants had a bachelor’s degree or higher, compared with 32.6% of Canadian-born people aged 25 to 34 years and 24.8% of Canadian-born people aged 35 to 64 years.
Among people aged 25 to 64 years with a bachelor’s degree or higher, 79.1% of recent immigrants and 80.5% of established immigrants were employed in May 2021. The employment rate of recent immigrants with a degree was higher in 2021 than in 2016 or in any other census year since 2001. By contrast, the employment rate of established immigrants with a degree was lower in 2021 than in previous census years. The employment rates of Canadian-born people with a bachelor’s degree or higher were consistently higher than those of recent and established immigrants.
| Total | Recent immigrants | Established immigrants | Canadian-born people aged 25 to 34 |
Canadian-born people aged 35 to 64 |
|
|---|---|---|---|---|---|
| number | |||||
| People with a bachelor's degree or higher | |||||
| 2001 | 3,131,700 | 414,300 | 505,500 | 722,100 | 1,489,800 |
| 2006 | 3,883,100 | 597,300 | 664,900 | 800,900 | 1,820,000 |
| 2011 | 4,622,800 | 662,900 | 907,300 | 933,800 | 2,118,800 |
| 2016 | 5,201,300 | 795,600 | 1,107,900 | 1,015,800 | 2,282,000 |
| 2021 | 6,057,800 | 991,600 | 1,423,200 | 1,128,100 | 2,514,900 |
| percent | |||||
| People with a bachelor's degree or higher | |||||
| 2001 | 19.5 | 33.8 | 21.5 | 22.9 | 15.9 |
| 2006 | 22.7 | 46.6 | 24.5 | 25.7 | 18.2 |
| 2011 | 25.5 | 49.0 | 29.6 | 28.3 | 20.4 |
| 2016 | 28.0 | 49.9 | 34.2 | 29.9 | 22.1 |
| 2021 | 32.0 | 55.3 | 39.8 | 32.6 | 24.8 |
| percent | |||||
| Employment rates of people with a bachelor's degree or higher | |||||
| 2001 | 84.2 | 73.2 | 83.9 | 88.2 | 85.3 |
| 2006 | 83.2 | 75.4 | 82.2 | 87.8 | 84.0 |
| 2011 | 82.8 | 74.8 | 81.5 | 87.9 | 83.7 |
| 2016 | 83.3 | 75.7 | 82.4 | 88.5 | 84.2 |
| 2021 | 82.9 | 79.1 | 80.5 | 87.4 | 83.8 |
| percent | |||||
| Population growth from 2001 to 2021 | 93.4 | 139.3 | 181.5 | 56.2 | 68.8 |
|
Note: The estimated population numbers are rounded to the nearest 100. Sources: Statistics Canada, 2001, 2006, 2016 and 2021 censuses of population; and 2011 National Household Survey. |
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Education–occupation match has improved for recent immigrants since 2016
Employment growth was more concentrated in high-skilled occupations from 2016 to 2021 than in the previous 15 years for both recent immigrants and younger Canadian-born workers (aged 25 to 34 years) with a bachelor’s degree or higher.Note Among recent immigrants with a bachelor’s degree or higher, 59% of employment growth from 2016 to 2021 was in high-skilled occupations, compared with 32% from 2001 to 2016.Note Relative growth of employment in high-skilled occupations was higher for younger Canadian-born workers with a degree from 2016 to 2021 (+90%) and in the previous 15 years (+61%).
In the 2016-to-2021 period, the total number of workers with a bachelor’s degree or higher grew 15.9%, but their employment in high-skilled occupations grew even more, at 17.8%. With the stronger demand for high-skilled workers, the total overeducation rate in Canada decreased from 14.8% in 2016 to 13.5% in 2021, while the education–occupation match increased 1 percentage point (Table 2). This finding was opposite to the trend over the 2001-to-2016 period, when the match rate decreased from 64.2% to 60.2%.
This change in labour demand reversed the trend towards education–occupation mismatch among recent immigrants. The overeducation rate of recent immigrants decreased from 31.1% in 2016 to 26.7% in 2021.Note Their rate of education–occupation match concurrently increased from 40.0% in 2016 to 44.4% in 2021.
Even with these improvements, a large percentage of recent immigrants with a degree were in mismatched occupations in 2021, and their rate of education–occupation match was lower than it was 20 years earlier. Furthermore, the disparity in education–occupation match between recent immigrants and young Canadian-born workers was larger in 2021 than it was 20 years earlier. In 2021, the overeducation rate of recent immigrants was more than double that of young Canadian-born workers.
Longer duration of residence in Canada decreased the disparity in education–occupation match with Canadian-born workers, but the gap in overeducation was still large for established immigrants who have been permanent residents of Canada for over 10 years. In 2021, 17.1% of established immigrants were overeducated for their occupations, a small decrease from the 2016 rate. Education–occupation match among established immigrants was unchanged from 2016 to 2021, after decreasing from 2001 to 2016.
The decreases in education–occupation mismatch since 2016 were widespread among recent immigrantsNote
About two-thirds of recent immigrants in 2021 had a degree from a foreign institution,Note and this was a key correlate for their high rate of education–occupation mismatch. The overeducation rate of recent immigrants with a foreign degree was 24 percentage points higher than that of younger Canadian-born workers, while it was less than 2 percentage points higher for recent immigrants with a Canadian degree. Overeducation has decreased since 2016 for recent immigrants with a foreign degree and those with a Canadian degree.
In 2021, the overeducation rate of recent immigrants was highest among those from Southeast Asia (54.7%) and lowest among those from Northern Europe (7.3%).Note A large share of those from Southeast Asia were admitted as caregivers (31.4%), a subgroup that had a very high overeducation rate (69.2%). The decrease in overeducation since 2016 occurred for recent immigrants from all source regions but was largest for those from South Asia (from 35.6% to 26.9%), which was the leading source of new immigrants. There were also relatively large decreases in overeducation among recent immigrants from Central and South America (from 30.0% to 23.9%) and East Asia (from 22.5% to 17.6%).
The overeducation rate also decreased to a large extent for recent economic immigrants in the Federal Skilled Worker Program (from 26.7% to 19.9%) and Provincial Nominee Program (from 36.6% to 31.6%). The overeducation rate of recent immigrants in the Canadian Experience Class was relatively low and decreased from 14.1% to 12.4%. These decreases in overeducation occurred alongside the introduction of the Express Entry System in 2015 and other changes in immigrant selection that were designed to improve the economic outcomes of immigrants. Overeducation decreased to a smaller extent among other economic immigrants, family-sponsored immigrants and refugees.
In sum, the stronger demand for high-skilled workers since 2016 and changes in immigrant selection reversed the trend towards education–occupation mismatch among recent immigrants with a bachelor’s degree or higher. Despite this improvement, many recent immigrants with a foreign degree encounter disadvantages in the Canadian labour market that contribute to a high rate of education–occupation mismatch.
Authors
Christoph Schimmele and Feng Hou are with the Social Analysis and Modelling Division, Statistics Canada.
Acknowledgments
The authors thank René Morissette for his suggestions for improvement on an earlier draft of this study.
| Total | Recent immigrants | Established immigrants | Canadian-born people aged 25 to 34 |
Canadian-born people aged 35 to 64 |
|
|---|---|---|---|---|---|
| number | |||||
| 2001 | |||||
| Overeducation | 371,000 | 87,100 | 63,900 | 98,300 | 121,700 |
| Marginal overeducation | 571,300 | 70,700 | 96,500 | 145,700 | 258,500 |
| Education–occupation match | 1,693,200 | 145,400 | 263,500 | 393,000 | 891,300 |
| Total | 2,635,500 | 303,200 | 423,900 | 637,000 | 1,271,500 |
| 2006 | |||||
| Overeducation | 528,200 | 148,100 | 100,300 | 110,000 | 169,800 |
| Marginal overeducation | 694,000 | 105,400 | 124,000 | 152,500 | 312,100 |
| Education–occupation match | 2,007,800 | 196,900 | 322,500 | 440,900 | 1,047,400 |
| Total | 3,230,000 | 450,400 | 546,800 | 703,400 | 1,529,300 |
| 2011 | |||||
| Overeducation | 532,400 | 137,900 | 125,800 | 104,100 | 164,600 |
| Marginal overeducation | 915,200 | 141,200 | 191,700 | 194,400 | 387,800 |
| Education–occupation match | 2,380,800 | 216,800 | 421,800 | 522,000 | 1,220,100 |
| Total | 3,828,400 | 495,900 | 739,300 | 820,500 | 1,772,500 |
| 2016 | |||||
| Overeducation | 642,600 | 187,300 | 162,300 | 122,000 | 170,900 |
| Marginal overeducation | 1,081,400 | 174,400 | 248,800 | 224,400 | 433,800 |
| Education–occupation match | 2,610,900 | 240,800 | 501,500 | 552,500 | 1,316,100 |
| Total | 4,334,900 | 602,500 | 912,600 | 898,900 | 1,920,800 |
| 2021 | |||||
| Overeducation | 677,500 | 209,000 | 196,200 | 107,400 | 165,000 |
| Marginal overeducation | 1,269,700 | 227,200 | 316,800 | 247,300 | 478,300 |
| Education–occupation match | 3,076,700 | 347,700 | 633,200 | 631,000 | 1,464,800 |
| Total | 5,023,900 | 783,900 | 1,146,200 | 985,700 | 2,108,100 |
| percent | |||||
| 2001 | |||||
| Overeducation | 14.1 | 28.7 | 15.1 | 15.4 | 9.6 |
| Marginal overeducation | 21.7 | 23.3 | 22.8 | 22.9 | 20.3 |
| Education–occupation match | 64.2 | 48.0 | 62.2 | 61.7 | 70.1 |
| 2006 | |||||
| Overeducation | 16.4 | 32.9 | 18.4 | 15.6 | 11.1 |
| Marginal overeducation | 21.5 | 23.4 | 22.7 | 21.7 | 20.4 |
| Education–occupation match | 62.2 | 43.7 | 59.0 | 62.7 | 68.5 |
| 2011 | |||||
| Overeducation | 13.9 | 27.8 | 17.0 | 12.7 | 9.3 |
| Marginal overeducation | 23.9 | 28.5 | 25.9 | 23.7 | 21.9 |
| Education–occupation match | 62.2 | 43.7 | 57.1 | 63.6 | 68.8 |
| 2016 | |||||
| Overeducation | 14.8 | 31.1 | 17.8 | 13.6 | 8.9 |
| Marginal overeducation | 25.0 | 29.0 | 27.3 | 25.0 | 22.6 |
| Education–occupation match | 60.2 | 40.0 | 55.0 | 61.5 | 68.5 |
| 2021 | |||||
| Overeducation | 13.5 | 26.7 | 17.1 | 10.9 | 7.8 |
| Marginal overeducation | 25.3 | 29.0 | 27.6 | 25.1 | 22.7 |
| Education–occupation match | 61.2 | 44.4 | 55.2 | 64.0 | 69.5 |
|
Note: The estimated numbers of workers are rounded to the nearest 100. Sources: Statistics Canada, 2001, 2006, 2016 and 2021 censuses of population; and 2011 National Household Survey. |
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References
Chen, X., & Fougère, M. (2014). How persistent is the occupation-education mismatch in Canada? International Scholarly Research Notices.
Cornelissen, L., & Turcotte, M. (2020). Persistent overqualification among immigrants and non-immigrants. Insights on Canadian Society. Statistics Canada Catalogue no. 75-006-X.
Crossman, E., Hou, F., & Picot, G. (2021). Are the gaps in labour market outcomes between immigrants and their Canadian-born counterparts starting to close? Economic and Social Reports, 1(4), 1–19.
Frenette, M. (2023). The changing nature of work since the onset of the COVID-19 pandemic. Economic and Social Reports, 3(7), 1–11.
Hou, F., Lu, Y., & Schimmele, C. (2019). Recent trends in over-education by immigration status. Analytical Studies Branch Research Paper Series, No. 436. Statistics Canada Catalogue no. 11F0019M.
Picot, G., Hou, F., & Qiu, H. (2016). The human capital model of selection and immigrant economic outcomes. International Migration, 54(3), 73–88.
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