Economic and Social Reports
Citizenship and the economic outcomes of immigrants in Canada
DOI: https://doi.org/10.25318/36280001202500600003-eng
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This study was jointly conducted by Immigration, Refugees and Citizenship Canada and Statistics Canada.
Abstract
Previous research indicates that immigrants who obtain citizenship in the receiving country gain various benefits, including enhanced legal status, expanded rights, increased political and civic engagement, and a stronger sense of collective identity and belonging. However, empirical studies remain inconclusive on whether acquiring citizenship improves immigrants’ labour market outcomes. This paper asks two questions. First, is Canadian citizenship correlated with better economic outcomes among immigrants in Canada? Second, if so, does citizenship acquisition lead to an improvement in labour market outcomes? The answer to the first question is yes. Immigrants who became citizens had higher earnings, had higher employment levels and were more likely to be employed in the public sector than their counterparts who did not become citizens. The answer to the second question is no. Using longitudinal data and a fixed-effects regression model, the study finds little evidence that the act of citizenship acquisition directly resulted in the observed positive correlation between citizenship and economic outcomes. Immigrants who became citizens economically outperformed those who did not, mostly because immigrants who chose to become citizens possessed other characteristics (such as unmeasured skills and motivations) that resulted in their better economic outcomes.
Keywords: immigrants, citizenship, naturalization, earnings, employment
Authors
Garnett Picot is with the Research and Knowledge Mobilization Division, Research and Data Branch, at Immigration, Refugees and Citizenship Canada. Feng Hou is with the Economic and Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada.
Acknowledgments
This is a joint study conducted by Immigration, Refugees and Citizenship Canada and Statistics Canada. The authors would like to thank George Carothers, Marc Frenette, Andrew Griffith and Maciej Karpinski for their advice and comments on an earlier version of this article.
Introduction
This study asks whether naturalization (the act of acquiring citizenship) results in improved economic outcomes for immigrants. Given that economic integration is one of the major issues facing immigrants, there has been considerable interest in whether citizenship acquisition can be employed to improve such integration. Naturalization may be expected to improve immigrants’ economic outcomes for several reasons. The most often cited reason relates to the restricted access by non-citizens to particular types of jobs. In Canada, most jobs in the federal government were open only to citizens until recently.Note This is true in most Western countries. For example, in the United States, employment in many federal agencies, the defence industry and think tanks is restricted to citizens. In some states, police officers must be citizens (Ingraham, 2011).
There may be other more informal advantages that immigrants who are citizens hold over non-citizens in the labour market. Non-citizens may be seen by employers as less committed to the country, and hence more likely to move onward or return to their home country. Citizenship acquisition displays a commitment to the country and a desire to integrate into the economy and society. Employers may be more willing to hire, train and promote immigrants who are citizens for these reasons. Because of their longer-term commitment to Canada, immigrants who are citizens may themselves be more likely than non-citizens to undertake activities that result in better economic outcomes. These activities may include improving their educational attainment, training for jobs in demand in the receiving country and developing a job-related network.
There are many other benefits to citizenship acquisition besides the potential for better economic outcomes. Naturalization positively affects immigrants’ legal status, rights, and political and civic activities. More specifically, after naturalization, immigrants can vote in federal, provincial and municipal elections, as well as run for office and become involved in political activities. Naturalized immigrants can also obtain a passport, which has many advantages over a permanent residency card. A Canadian passport allows an immigrant to travel to many countries without the need for a visa or makes it easier to get a visa if one is required. The passport allows holders to obtain the support of Canadian consulates and embassies should issues arise in a foreign country. It also makes it less likely to encounter problems when returning to Canada from abroad. As well, naturalized immigrants cannot be deported. Furthermore, children born abroad to Canadian citizens automatically become Canadian citizens themselves without going through any application process.
Being a citizen can also increase an immigrant’s sense of commitment and belonging to Canada. A recent study comparing immigrants’ views of citizenship in Canada and the United States found that Canadian naturalized immigrants tended to see “naturalization as a process that tied them to a positively valued nation.” While this certainly applies to many if not most naturalized Americans as well, they were more likely than their naturalized Canadian counterparts to see “citizenship as offering some protection in an anti-immigrant policy environment” (Aptekar, 2016). Some European studies also found that naturalization shapes immigrants’ social interactions, partner choice and fertility decisions (Gathmann & Monscheuer, 2020).
This paper is concerned with one particular potential benefit of naturalization, the possibility of improving immigrants’ economic integration. While many empirical studies suggest a positive association between citizenship and labour market integration, not all studies support these findings (Peters & Vink, 2016). For example, Bratsberg et al. (2002), Steinhardt (2012), Helgertz et al. (2014), Gathmann and Monscheuer (2020), and Hainmueller et al. (2019) found evidence of a positive association between citizenship and labour market integration. However, Chiswick (1978), Scott (2008), Bevelander and Veenman (2006), Bratsberg and Raaum (2011), and Hainmueller et al. (2023) found no such effect.
Virtually all previous studies found that, on average, economic outcomes for naturalized immigrants are superior to those of immigrants who did not become citizens. This result may hold even after controlling for observable differences between the two groups, such as age and education. Put another way, there is a positive association between naturalization and economic outcomes. However, the primary challenge in studies aiming to move beyond association to causality is the potential selection effect, whereby immigrants who become citizens may possess unobserved characteristics that contribute to greater wage gains beyond those accounted for by the observable variables. These unobserved characteristics could include factors such as motivation based on the desire and commitment to succeed in the receiving country, interpersonal skills, and the quality of education and labour market experience before immigration. If the selection effect is strong, then it is not naturalization that “causes” superior wage gains or other labour market outcomes, but rather the differences in unobserved characteristics. Some studies use fixed-effects models based on longitudinal data to account for such selection effects. For example, Bratsberg and Raaum (2011) found no effect of naturalization on labour market outcomes in Norway when using fixed-effects models. An alternative approach to accounting for selection effects is to use a randomized control design. Hainmueller et al. (2023) employed such an approach for the United States and found no economic returns to naturalization.
For Canada, DeVoretz and Pivnenko (2005) found that wages were positively associated with naturalization and that this effect was stronger for immigrants from developing countries, a common finding. However, a decomposition analysis found that the superior economic outcomes among naturalized immigrants were attributable to a self-selection effect. That is, immigrants who became citizens possessed characteristics that resulted in their superior outcomes. The outcome was not attributable to the act of naturalization. Pendakur and Bevelander (2014) used an instrumental variable regression approach and concluded that naturalized immigrants had better outcomes compared with non-citizen immigrants. Another paper (Zanoni & He, 2021) used the change in the residency requirement for citizenship acquisition from three to four years to estimate what effect delaying citizenship for one year would have on wages. Employing data from the Labour Force Survey and immigrant landing records, they concluded that the change in the residency requirement reduced wages among men who became naturalized by 11%. Put another way, one extra year of citizenship resulted in an 11% increase in wages. This is a suspiciously large increase for a single year of citizenship.
Overall, the results for Canada based on earlier research are inconclusive. Naturalized immigrants often achieve better labour market outcomes than non-citizens, but whether this relationship is causal remains unclear. Accounting for self-selection into citizenship is a major methodological issue.
Using newly available longitudinal data at the individual level, this study examines the economic effects of citizenship acquisition among immigrants in Canada. To account for selection effects, this paper turns to individual fixed-effects models, such as those used by Bratsberg and Raaum (2011).
Data, measures and methods
This study uses data from the Longitudinal Immigration Database (IMDB), which combines the landing records and annual tax information of immigrants (Statistics Canada, 2024). The landing records contain immigrant characteristics at the time of landing, such as admission category (e.g., economic class, family class or refugee), age, education, marital status, source country and official language capabilities. Tax records provide information on annual income, industry of employment and place of residence. Also included in the IMDB is the date of citizenship acquisition for those who were naturalized since 2004. The IMDB data used in this study cover citizenship information up to 2023 and tax information up to 2022.
This paper restricts the study sample to immigrants who obtained permanent residency from 2003 to 2012. Since hardly any new immigrants acquired Canadian citizenship in the year of immigration,Note the choice of 2003 as the starting year essentially includes all new immigrants who acquired citizenship after 2003, when citizenship information becomes available. The choice of 2012 as the ending year ensures that there are at least 10 years of data for labour market outcomes since immigration (or 11 years of data on citizenship) for people included in the study. Previous studies found that most immigrants who became citizens did so by the time they had been in Canada for 10 years; relatively few immigrants became citizens after 10 years in Canada (Hou & Picot, 2024).Note
The analysis is further limited to immigrants who were aged 20 to 54 at admission, because they are prime-aged workers at admission. After 15 years in Canada, the maximum follow-up period used in the study, these immigrants would be aged 35 to 69.
The main outcome variables in this study are employment incidence, employment in the public sector and annual earnings among those who had employment earnings. Employment incidence for an immigrant is defined as having annual earnings of at least $500 in a given year.Note Employment in the public sector is used as the second outcome, because hiring in the public sector, especially the federal government, often gives preference to Canadian citizens. The public sector in this study includes federal, provincial and local public administration; other federal services; public educational institutions; and hospitals. Annual earnings are measured in 2022 constant dollars, and logarithmic transformation is used in the analysis.
In many places, the analysis is conducted separately for men and women. Among immigrants in particular, the labour market can be quite different for men and women, with different wage levels and employment in different industries. The separate analysis indicates whether the results apply equally to both of these sexes.
In the multivariate analysis, selected covariates are used to account for differences in sociodemographic characteristics between immigrants who acquired Canadian citizenship and those who did not. These covariates include years since immigration, admission cohort (year of immigration), age at immigration, educational level at immigration, self-reported knowledge of official languages at immigration, immigration class, source country and province of residence. Age at immigration is grouped into three categories: 20 to 34, 35 to 44 and 45 to 54. Education is grouped into four levels: high school education or less, some postsecondary education, bachelor’s degree and graduate degree. Official languages have four categories: English, French, English and French, and neither English nor French. Immigration class has eight categories: Federal Skilled Worker Program, Canadian Experience Class, Provincial Nominee Program, Quebec selection, other economic classes, family class, refugees and others. There are 11 source country categories, based on the top source countries: China, India, Philippines, Pakistan, the United Kingdom, Iran, the United States, South Korea, France, Colombia and other countries.
Following the analytical approach used by Bratsberg and Raaum (2011), for each outcome, this study estimates four regression models to illustrate the differences in labour market outcomes by citizenship status:
Model 1:
is the labour market outcome of immigrant in year , and equals 1 if an immigrant acquires citizenship in year (and after) and 0 for years before acquiring citizenship or immigrants who did not acquire citizenship in the follow-up period. represents years since immigration. It is included in the model as a flexible functional form with an indicator variable for each value of in the data. is a vector of covariates (as discussed above). The residuals are allowed to be correlated across time by clustering standard errors within individuals.
Model 2:
is an indicator variable set to 1 for those who eventually acquire citizenship in the follow-up period. The addition of * allows immigrants who eventually acquire citizenship to have a different outcome trajectory from other immigrants. It shows whether immigrants who eventually acquire citizenship have better labour market outcomes even years before they acquire citizenship. If is positive and significant, the estimated (representing the effect of citizenship acquisition) in Model 1 would be reduced.
Model 3:
captures individual fixed effects. When individual fixed effects are included in the model, the effects of time-invariant covariates cannot be estimated and are dropped from the model. If immigrants who eventually acquire Canadian citizenship have better unobserved ability that leads to better labour market outcomes than other immigrants, the estimated in models 1 and 2 would be reduced or become not significant.
Model 4:
represents the year when the outcome is measured, and represents the year when an immigrant acquires citizenship. The variable ( - ) applies only to immigrants who eventually acquire citizenship, and it is included in the model as a series of dummy variables representing each year before and after the year of citizenship acquisition. While for in models 1 to 3 assumes that any effect of citizenship acquisition on labour market outcomes would be a one-time change (a change in the intercept), for ( - ) in Model 4 tests whether citizenship acquisition also results in an increase in marginal returns to an additional year in the labour market (an increase in the slope of the outcome trajectory). In particular, the flexible specification of ( - ) identifies any additional change in the outcome that might take place during the years immediately before and following citizenship acquisition.
Descriptive statistics
Immigrants who acquire citizenship have significantly different background characteristics from those who do not. These differences likely affect their economic integration as measured by their employment incidence, the percentage of them employed in the public sector and their annual earnings. Table 1 outlines such characteristics for immigrants who were admitted from 2003 to 2012 and were aged 20 to 54 at admission.
Immigrants who acquired citizenship from 2004 to 2023 were much more highly educated than their counterparts who were not naturalized. About 56% of naturalized immigrants had a university degree compared with 40% of those who were not naturalized. Non-citizens were also more likely to speak neither English nor French at the time of admission—31% compared with 16% of naturalized immigrants.Note In addition, a higher percentage of naturalized immigrants entered via the Federal Skilled Worker Program or Canadian Experience Class (31%) compared with non-citizens (24%). These differences are likely to result in higher earnings and employment levels for naturalized immigrants relative to those of immigrants who did not acquire citizenship. There were also differences between the two groups in terms of source region, notably with non-citizens being much more likely to come from East Asia (mainly China), the United States, and Western and Northern Europe.
Acquired citizenship | Did not acquire citizenship | |
---|---|---|
Source: Statistics Canada, Longitudinal Immigration Database. | ||
Sex at birth | percent | |
Male | 46.1 | 49.6 |
Female | 54.0 | 50.4 |
Age at admission | ||
20 to 34 years | 59.8 | 51.8 |
35 to 44 years | 28.9 | 33.3 |
45 to 54 years | 11.3 | 14.9 |
Education | ||
Secondary or less | 26.9 | 39.1 |
Some postsecondary | 17.5 | 21.5 |
Bachelor's degree | 39.7 | 27.3 |
Graduate degree | 15.9 | 12.2 |
Official languages | ||
French only | 6.9 | 3.5 |
English and French | 14.5 | 7.2 |
Neither English nor French | 16.0 | 31.4 |
English | 62.6 | 57.9 |
Immigration class | ||
Provincial Nominee Program | 8.1 | 12.1 |
Quebec selection | 15.1 | 9.7 |
Other economic class | 6.1 | 7.9 |
Family class | 26.1 | 37.9 |
Refugees | 11.9 | 7.0 |
Others | 1.7 | 1.5 |
Federal Skilled Worker Program and Canadian Experience Class | 31.0 | 24.1 |
Source region | ||
Caribbean and Central and South America | 11.9 | 7.9 |
Western and Northern Europe | 5.6 | 10.7 |
Southern and Eastern Europe | 8.4 | 4.4 |
Africa | 15.5 | 5.2 |
Southern Asia | 20.2 | 16.3 |
Southeast Asia | 13.5 | 9.9 |
East Asia | 11.6 | 33.3 |
West Asia | 10.8 | 5.1 |
Oceania | 1.1 | 1.4 |
United States | 1.5 | 5.8 |
Charts 1 to 3 display the growth in employment incidence, the proportion in the public sector and log annual earnings by years since admission. There are two significant observations based on these data.
First, employment levels, the percentage of people working in the public sector and earnings (log annual earnings) were significantly higher among immigrants who acquired citizenship at some point during their tenure in Canada up to 2023 than among those who did not. For example, five years after admission, employment incidence was 90% among male immigrants who became citizens, compared with 78% among their counterparts who did not become citizens. Similarly, five years after admission, earnings were 31%, or 0.28 log points (10.60 minus 10.33), higher among men who became citizens by 2023 than among those who did not. These results held for men and women and for all reported years since admission.
Second, immigrants who became citizens not only had higher employment incidence, a greater percentage of them working in the public sector and higher earnings levels, but also had steeper trajectories since admission of these outcomes compared with those who did not become citizens. For example, from the 1st to the 10th year following admission, employment incidence grew by 4 percentage points among male immigrants who were naturalized, compared with no change for non-citizens. Annual earnings among male immigrants who were naturalized increased by 60 log points (10.80 minus 10.20, or 82%) during the first 10 years following admission, compared with 39 log points (48%) among those who were not naturalized. Similarly, improvement in labour market outcomes was greater among naturalized immigrant women than among non-citizen women.
To summarize, immigrants admitted from 2003 to 2012 who were naturalized at some point during their tenure in Canada up to 2023 had considerably higher levels of earnings and employment and more rapid growth in these outcomes; they were also more likely to work in the public sector than those who did not acquire citizenship.Note Immigrants who became citizens registered superior economic integration. But this does not necessarily mean that it is attributable to the naturalization itself. There may be observable differences in sociodemographic characteristics between the two groups that account for the difference in economic integration. There may also be other unobserved factors that account for the differences. Immigrants with characteristics that result in superior economic outcomes may self-select into the citizen group, resulting in better outcomes that are not necessarily caused by the citizenship acquisition. The statistical analysis that follows addresses these issues.
Data table for Chart 1
Years since immigration | Men, non-citizens | Men, citizens | Women, non-citizens | Women, citizens |
---|---|---|---|---|
percent | ||||
Source: Statistics Canada, Longitudinal Immigration Database. | ||||
1 | 77.1 | 85.1 | 57.9 | 65.5 |
2 | 77.3 | 87.2 | 57.8 | 68.2 |
3 | 77.3 | 88.8 | 58.4 | 70.5 |
4 | 77.5 | 89.6 | 58.9 | 72.0 |
5 | 77.5 | 89.8 | 59.9 | 73.0 |
6 | 76.9 | 89.6 | 60.4 | 73.7 |
7 | 77.0 | 89.7 | 61.3 | 74.4 |
8 | 77.1 | 89.5 | 62.0 | 75.1 |
9 | 76.9 | 89.2 | 62.4 | 75.6 |
10 | 77.0 | 89.0 | 62.9 | 76.0 |
Data table for Chart 2
Years since immigration | Men, non-citizens | Men, citizens | Women, non-citizens | Women, citizens |
---|---|---|---|---|
percent | ||||
Source: Statistics Canada, Longitudinal Immigration Database. | ||||
1 | 4.5 | 8.0 | 9.3 | 13.4 |
2 | 4.5 | 9.4 | 10.1 | 16.2 |
3 | 4.7 | 10.3 | 10.6 | 18.4 |
4 | 4.7 | 11.1 | 11.2 | 20.1 |
5 | 4.9 | 11.8 | 11.6 | 21.7 |
6 | 5.1 | 12.5 | 12.2 | 23.0 |
7 | 5.3 | 13.1 | 12.8 | 24.2 |
8 | 5.5 | 13.6 | 13.2 | 25.5 |
9 | 5.8 | 14.2 | 13.9 | 26.7 |
10 | 6.0 | 14.8 | 14.6 | 27.9 |
Data table for Chart 3
Years since immigration | Men, non-citizens | Men, citizens | Women, non-citizens | Women, citizens |
---|---|---|---|---|
log earnings in 2022 constant dollars | ||||
Source: Statistics Canada, Longitudinal Immigration Database. | ||||
1 | 10.09 | 10.20 | 9.62 | 9.71 |
2 | 10.17 | 10.35 | 9.70 | 9.84 |
3 | 10.23 | 10.46 | 9.75 | 9.95 |
4 | 10.29 | 10.54 | 9.82 | 10.03 |
5 | 10.33 | 10.60 | 9.87 | 10.11 |
6 | 10.38 | 10.66 | 9.93 | 10.18 |
7 | 10.42 | 10.71 | 9.97 | 10.24 |
8 | 10.43 | 10.74 | 9.98 | 10.28 |
9 | 10.45 | 10.77 | 10.01 | 10.33 |
10 | 10.48 | 10.80 | 10.05 | 10.37 |
Multivariate analysis
Three sets of ordinary least squares regression models are employed, each with a different dependent variable. They are employment incidence, the proportion of people with public sector employment and the log of annual earnings. The sample includes immigrants who were admitted to Canada from 2003 to 2012 and were aged 25 to 54 at admission.
For each of these three dependent variables, three separate regression models are run. In addition to the primary independent variable—citizenship status—Model 1 controls for several observable variables, including admission cohort, immigrant class, age, education, official language at admission, source region and province of residence. The years since immigration variable is also included and is assumed to have the same trajectory over time for naturalized immigrants and non-citizens. This regression model essentially accounts for the effect on their economic outcomes of differences between naturalized and non-citizen immigrants in these background variables.
Results from Model 1 show that immigrants who acquired citizenship had superior outcomes even after controlling for differences in observable background characteristics. Among men, employment incidence was 7.2 percentage points higher among the naturalized group, public sector employment was 4.6 percentage points higher, and annual earnings were 19.3 log points (or 21%) above those of non-citizens. Results for women were similar (Table 2).
As noted in the descriptive statistics above, the trajectory over time of employment incidence and earnings was steeper among citizens than non-citizens. Model 2 includes all the independent variables from Model 1, but relaxes the assumption that the trajectory of all three dependent variables is the same for naturalized immigrants and other immigrants. In this case, the two groups can have different trajectories with years since immigration.Note The results of Model 2 indicate that while immigrants who become citizens continue to have superior outcomes, the difference between the two groups is considerably reduced. Among men, employment incidence was 2.0 percentage points higher among citizens than non-citizens, public sector employment was 3.2 percentage points higher, and annual earnings were 13.0 log points (14%) higher (Table 2). Results were similar for women.
Employment incidence | Public sector employment | Log annual earnings | |
---|---|---|---|
Source: Statistics Canada, Longitudinal Immigration Database. |
|||
Men | |||
Model 1 | 0.072Table 2 Note *** | 0.046Table 2 Note *** | 0.193Table 2 Note *** |
Model 2 | 0.020Table 2 Note *** | 0.032Table 2 Note *** | 0.130Table 2 Note *** |
Model 3 | -0.016Table 2 Note *** | 0.003Table 2 Note *** | -0.005Table 2 Note *** |
Women | |||
Model 1 | 0.093Table 2 Note *** | 0.065Table 2 Note *** | 0.198Table 2 Note *** |
Model 2 | 0.048Table 2 Note *** | 0.043Table 2 Note *** | 0.150Table 2 Note *** |
Model 3 | -0.004Table 2 Note *** | 0.006Table 2 Note *** | 0.019Table 2 Note *** |
Furthermore, there may be differences between naturalized and non-citizen immigrants in some unobserved characteristics that result in superior economic outcomes among the naturalized group. These unobserved factors may include motivation based on the desire and commitment to succeed in the receiving country, interpersonal skills, and the quality of education and labour market experience before immigration. To account for such differences, an individual fixed-effects regression model is employed. The model takes advantage of the longitudinal nature of the data to, essentially, control for all characteristics of each individual, both observed and unobserved, that are time invariant (i.e., fixed over time).
The superior outcomes of naturalized immigrants disappear in the individual fixed-effects model (Model 3 in Table 2). For example, among men, employment incidence is seen to be 1.6 percentage points lower among the naturalized group than among non-citizens, and public sector employment levels and annual earnings were virtually the same between the two groups. Again, the results were very similar for women, except that annual earnings were seen to be marginally higher (2%) among citizens than non-citizen immigrants (Table 2).
Hence, after accounting for different years-since-immigration trajectories and unobserved differences, the effects of naturalization on the three economic outcomes are very small, and possibly even marginally negative. There is no evidence of an important direct effect of naturalization on economic outcomes in these results. However, immigrants who choose to become citizens have better economic outcomes compared with those who do not, although naturalization does not appear to be the cause of such differences.
Economic outcomes before and after naturalization
The multivariate analysis to this point allows for a one-time difference in outcome levels (e.g., employment incidence and wage levels) as the result of naturalization. However, the effect of naturalization may not be immediate and is perhaps seen two or three years after naturalization. To determine whether this is the case, the changes in the outcomes in the years before and after naturalization are estimated, as explained in Model 4 in the Data, measures and methods section. Here, the focus is on the difference in, for example, log annual earnings between the year of naturalization and the three years before naturalization and the three years after. This approach is used for all three outcome variables. Two models are run (Table 3). In addition to the primary independent variable, which is years before (negative) and after (positive) naturalization, with the year of naturalization as a reference group, Model 1 controls for the selected independent variables.Note Model 2 controls for individual fixed effects and excludes time-invariant individual characteristics in Model 1. The sample is identical to that included in Table 2.
Employment incidence | Public sector employment | Log annual earnings | ||||
---|---|---|---|---|---|---|
Model 1 | Model 2 | Model 1 | Model 2 | Model 1 | Model 2 | |
Source: Statistics Canada, Longitudinal Immigration Database. |
||||||
Men | ||||||
Three years before | -0.011Table 3 Note *** | 0.008Table 3 Note *** | -0.024Table 3 Note *** | -0.008Table 3 Note *** | -0.091Table 3 Note *** | -0.031Table 3 Note *** |
Two years before | -0.004Table 3 Note *** | 0.009Table 3 Note *** | -0.011Table 3 Note *** | -0.002Table 3 Note *** | -0.043Table 3 Note *** | -0.005Table 3 Note ** |
One year before | -0.001 | 0.006Table 3 Note *** | -0.006Table 3 Note *** | -0.001Table 3 Note ** | -0.018Table 3 Note *** | 0.004Table 3 Note * |
One year after | -0.005Table 3 Note *** | -0.012Table 3 Note *** | 0.007Table 3 Note *** | 0.002Table 3 Note *** | 0.018Table 3 Note *** | -0.007Table 3 Note *** |
Two years after | -0.004Table 3 Note *** | -0.018Table 3 Note *** | 0.012Table 3 Note *** | 0.004Table 3 Note *** | 0.048Table 3 Note *** | 0.002 |
Three years after | 0.002Table 3 Note ** | -0.019Table 3 Note *** | 0.019Table 3 Note *** | 0.006Table 3 Note *** | 0.082Table 3 Note *** | 0.016Table 3 Note *** |
Women | ||||||
Three years before | -0.037Table 3 Note *** | -0.011Table 3 Note *** | -0.031Table 3 Note *** | -0.013Table 3 Note *** | -0.113Table 3 Note *** | -0.060Table 3 Note *** |
Two years before | -0.018Table 3 Note *** | -0.002Table 3 Note ** | -0.018Table 3 Note *** | -0.007Table 3 Note *** | -0.058Table 3 Note *** | -0.026Table 3 Note *** |
One year before | -0.008Table 3 Note *** | 0.001 | -0.008Table 3 Note *** | -0.003Table 3 Note *** | -0.028Table 3 Note *** | -0.012Table 3 Note *** |
One year after | 0.001 | -0.007Table 3 Note *** | 0.008Table 3 Note *** | 0.002Table 3 Note *** | 0.023Table 3 Note *** | 0.001 |
Two years after | 0.006Table 3 Note *** | -0.010Table 3 Note *** | 0.017Table 3 Note *** | 0.005Table 3 Note *** | 0.060Table 3 Note *** | 0.016Table 3 Note *** |
Three years after | 0.016Table 3 Note *** | -0.010Table 3 Note *** | 0.026Table 3 Note *** | 0.008Table 3 Note *** | 0.099Table 3 Note *** | 0.035Table 3 Note *** |
In most cases, the results support the findings observed above. For example, for men, after controlling for observed background variables (Model 1), earnings during the three years before naturalization were 2% to 9% below those observed in the year of naturalization (Table 3). During the three years following naturalization, earnings were 2% to 8% higher than in the year of naturalization. However, after controlling for fixed effects, there was little difference between the earnings observed in the year of naturalization and those observed either before or after naturalization.
The story for women was slightly different. As for men, Model 1 results displayed lower earnings before naturalization (3% to 11% lower) and higher earnings in the three years following naturalization (2% to 10% higher). Much, but not all, of this difference disappeared after controlling for fixed effects. Earnings before naturalization were 1% to 6% lower than in the year of naturalization, and earnings following naturalization were 0% to 4% higher. Hence, there is some evidence that naturalization may have marginally increased earnings for women, but the effect is relatively weak.
Regarding employment incidence, the results suggest that it tended to marginally decline following naturalization after controlling for fixed effects for men and women. The results from Model 2 indicate that for men, employment incidence was 1 to 2 percentage points lower during the three years following naturalization than it was in the year of naturalization. For women, it was about 1 percentage point lower. This is not a large effect.
The proportion employed in the public sector tended to marginally increase in Model 1 and Model 2 results during the three years following naturalization for men and women (close to 1 percentage point by the third year). This finding also suggests a weak naturalization effect on the likelihood of employment in the public sector.
Collectively, these results indicate that there is some association between naturalization and economic outcomes when controlling for observable characteristics. However, after controlling for fixed effects, naturalization has little direct effect on earnings, employment incidence or public sector employment.
Possible variation in the naturalization effect among different groups of immigrants
The results so far provide little evidence that for adult immigrants as a whole naturalization improves economic outcomes. However, there may be some subgroups for which that possibility holds. For example, earlier research indicated that the association between naturalization and economic outcomes is particularly strong among immigrants from developing nations. It may also be possible that immigrants in the family class and refugees—who tend to have weaker economic outcomes—may benefit economically from naturalization whereas immigrants in the economic class—already experiencing relatively strong economic outcomes—do not. To determine whether there is variation in the results among groups with different background characteristics, separate regressions are run for groups defined by age at admission, education and language at admission, as well as immigrant class and source region, for a total of 24 separate regressions. Model 3, described in the Data, measures and methods section, is employed. In addition to the naturalization variable, it controls for fixed effects and years since immigration. The results are reported in Table 4.
Overall, there is little evidence that naturalization has a large effect on economic outcomes for any group. While most of the results are statistically significant, the naturalization effect is typically very small, either positive or negative. For example, the effect of naturalization on annual earnings was larger than 2% (positive or negative) for only 7 of the 24 groups. And the effect on employment incidence reached 2 percentage points for only 3 of the 24 groups, and in these cases the effect was negative.
The variation that was observed seemed to be largest by source region. The naturalization effect for immigrants from economically developed regions such as Western and Northern Europe and the United States tended to be larger (from -3% to -4%) and negative. Other regions registered small positive or negative effects of less than 3%.
Overall, there was little indication that any group experienced a large effect of naturalization on employment incidence, log annual earnings or public sector employment.
Employment incidence | Public sector employment | Log annual earnings | |
---|---|---|---|
Source: Statistics Canada, Longitudinal Immigration Database. |
|||
Age at admission | |||
20 to 34 years | -0.004Table 4 Note *** | 0.004Table 4 Note *** | 0.008Table 4 Note *** |
35 to 44 years | -0.009Table 4 Note *** | 0.006Table 4 Note *** | 0.014Table 4 Note *** |
45 to 54 years | -0.017Table 4 Note *** | 0.004Table 4 Note *** | 0.000 |
Education | |||
Secondary or less | -0.004Table 4 Note *** | 0.006Table 4 Note *** | 0.010Table 4 Note *** |
Some postsecondary | -0.002Table 4 Note ** | 0.006Table 4 Note *** | 0.011Table 4 Note *** |
Bachelor's degree | -0.011Table 4 Note *** | 0.003Table 4 Note *** | -0.001 |
Graduate degree | -0.022Table 4 Note *** | 0.001 | -0.002 |
Official languages | |||
French only | 0.008Table 4 Note *** | 0.011Table 4 Note *** | 0.036Table 4 Note *** |
English and French | -0.007Table 4 Note *** | 0.004Table 4 Note *** | 0.006Table 4 Note * |
Neither English nor French | -0.008Table 4 Note *** | 0.005Table 4 Note *** | 0.011Table 4 Note *** |
English | -0.013Table 4 Note *** | 0.002Table 4 Note *** | -0.001 |
Immigration class | |||
Economic class | -0.015Table 4 Note *** | 0.002Table 4 Note *** | 0.001 |
Family class | -0.008Table 4 Note *** | 0.007Table 4 Note *** | 0.001 |
Refugees | 0.006Table 4 Note *** | 0.008Table 4 Note *** | 0.012Table 4 Note ** |
Source region | |||
Caribbean and Central and South America | 0.001 | 0.007Table 4 Note *** | 0.023Table 4 Note *** |
Western and Northern Europe | -0.017Table 4 Note *** | 0.001 | -0.037Table 4 Note *** |
Southern and Eastern Europe | 0.001 | 0.006Table 4 Note *** | 0.024Table 4 Note *** |
Africa | -0.002 | 0.009Table 4 Note *** | 0.026Table 4 Note *** |
Southern Asia | -0.018Table 4 Note *** | 0.004Table 4 Note *** | -0.004Table 4 Note * |
Southeast Asia | -0.007Table 4 Note *** | 0.004Table 4 Note *** | -0.003 |
East Asia | -0.020Table 4 Note *** | -0.002Table 4 Note *** | -0.001 |
West Asia | -0.013Table 4 Note *** | 0.001 | 0.026Table 4 Note *** |
Oceania | -0.013Table 4 Note *** | 0.005Table 4 Note * | -0.013 |
United States | -0.021Table 4 Note *** | -0.008Table 4 Note *** | -0.031Table 4 Note *** |
Conclusion
Given the long-standing interest in improving the economic outcomes of immigrants, researchers and policy analysts have looked to citizenship acquisition as a potential tool for improvement. This paper asks two separate questions. First, is naturalization associated with superior economic outcomes as measured by earnings, employment incidence and employment in the public sector? Second, if so, does citizenship acquisition lead to an improvement in labour market outcomes?
The answer to the first question is a definite yes. Immigrants who became citizens had higher earnings, had higher employment levels and were more likely to be employed in the public sector than their counterparts who did not become citizens. This observation held even after controlling for a rich set of background characteristics. The result fits with other results observed in the literature. Early studies typically found that naturalized immigrants had superior economic outcomes.
For Canada, the answer to the second question is no. Using longitudinal data and a fixed-effects regression model, this study finds little evidence that citizenship acquisition directly resulted in the observed positive correlation between citizenship and economic outcomes.
In sum, immigrants who became citizens economically outperformed those who did not naturalize. Immigrants who eventually acquired Canadian citizenship had better economic outcomes than other immigrants even in the years immediately after immigration and before acquiring citizenship. The results of this study indicate that it is not naturalization itself that directly results in these outcomes, at least in Canada. Rather, immigrants who choose to become citizens possess characteristics (including unmeasured abilities and motivation) that result in their superior economic outcomes. As discussed in the introduction, these immigrants who choose to become citizens also benefit from other advantages related to their legal status, rights, political activity, and a collective identity and sense of belonging.
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