Economic and Social Reports
Occupational match and economic outcomes of recent immigrants: A broad assessment

This study was jointly conducted by Immigration, Refugees and Citizenship Canada and Statistics Canada.

Abstract

This article provides a broad assessment of occupational match and associated earnings outcomes among immigrants admitted to Canada from 2010 to 2020. Using linked data from the Longitudinal Immigration Database and the 2021 Census of Population, this study examines the extent to which recent immigrants work in occupations aligned with their intended occupation at admission, identifies the characteristics associated with occupational match and analyzes the earnings implications of matching versus not matching with intended occupations.

Findings indicate that about one in five recent immigrants worked in their intended specific occupation in 2021, although match rates were higher at broader occupational levels. Occupational match varied substantially across sociodemographic groups: it was higher for those with a graduate education, those from more developed source countries and immigrants with previous Canadian work experience. Among those who did not work in their intended occupation, a large share moved to lower-skilled jobs, with older immigrants, women, those without official language knowledge and those lacking Canadian work experience facing the highest likelihood of downward mobility. Earnings differences between those who worked in their intended occupation and those who did not were large. Those who worked in their intended occupation earned nearly 50% more on average, underscoring the significant cost of skill mismatch. The earnings penalties of occupational mismatch were especially pronounced for highly educated immigrants.

Authors

Jianwei Zhong and Haozhen Zhang are with the Research and Knowledge Mobilization Division at Immigration, Refugees and Citizenship Canada. Hanqing Qiu and Feng Hou are with the Economic and Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada.

Acknowledgments

The authors would like to thank Winnie Chan, Chantal Goyette and Kathrine Wall for their advice and comments on an earlier version of this article.

Introduction

Immigrants’ occupational match, often referred to as the extent to which immigrants maintain or obtain employment consistent with their pre-migration skills and qualifications, reflects not only the efficiency of skill transferability but also the inclusiveness of the receiving country’s labour market. Research has emphasized occupational match as an important marker of successful economic integration (Schimmele & Hou, 2024). Some immigrants may experience occupational downgrading, where they are employed below the level of their pre-migration education and experience (Reitz, 2001; Chiswick & Miller, 2009). This mismatch, sometimes described as brain waste, undermines immigrants’ economic well-being and represents a loss of potential productivity for receiving societies (Mattoo, Neagu, & Özden, 2008). Occupational match is therefore essential to maximizing the returns on immigrants’ human capital and to ensuring that immigration systems effectively address labour market needs (Houle & Yssaad, 2010).

At the individual level, the ability to retain one’s occupational status is strongly linked to income, job satisfaction and mental health outcomes (Zikic, Bonache, & Cerdin, 2010). Conversely, persistent skill underutilization can lead to downward mobility and long-term disadvantages, limiting opportunities for economic and social advancement (Fuller & Martin, 2012). At the systemic level, low occupational match often signals broad structural barriers such as the non-recognition of foreign credentials, lack of host-country experience and discriminatory hiring practices (Sweetman & Warman, 2014).

Therefore, the study of occupational match provides empirical and policy-relevant insights. It captures the degree to which immigrants’ occupational intentions are realized in the Canadian labour market. While occupational match offers useful insights into skill alignment and the effectiveness of selection policies, it must be interpreted in light of systemic factors such as labour market demand and supply, foreign credential recognition, and licensing requirements, which can significantly influence occupational outcomes.

This article focuses on recent immigrants admitted from 2010 to 2020. It provides a broad assessment of their occupational match, examines patterns of movement to lower-skilled jobs when changing occupations and evaluates the impact of occupational mismatch on immigrants’ earnings.

Specifically, this article addresses three key research questions. First, to what extent do recent immigrants work in occupations that match their intended occupations at admission? Second, which groups are more likely to transition to lower-skilled occupations? And third, how does occupational match influence employment earnings?

Data and method

The Longitudinal Immigration Database and the 2021 Census of Population were linked to analyze occupational match and occupational change for immigrants. The target population includes immigrants aged 18 to 54 at admission who were admitted from 2010 to 2020 and had an intended occupation.^{Note 1}

Occupation is examined using the 2016 National Occupational Classification (NOC) at multiple levels. Occupational match is defined as a match between individuals’ intended occupation at the time of admission and their actual occupation in the 2021 Census at the two-digit (major group), three-digit (minor group) or four-digit (unit group) level. If the intended and actual occupation codes differ at a given level, the person is considered an occupational mismatch at that NOC level.

The extent of occupational match among recent immigrants

Overall match rates

Occupational match at the NOC four-digit level was 20% in 2021 among recent immigrants admitted from 2010 to 2020, indicating that about one in five worked in their intended specific occupation (Table 1). Match rates were higher at the three-digit (27%) and two-digit (32%) levels because these broader categories combine closely related unit groups, meaning that shifts among similar four-digit occupations are not considered as mobility at those levels.

Match rates by sociodemographic characteristics

Beyond overall trends, occupational match varied considerably across several sociodemographic characteristics, and these variations were generally consistent across the NOC two-digit, three-digit and four-digit levels.^{Note 2}

Immigrants who were aged 18 to 24 at admission had lower occupational match rates than those in older age groups at the NOC two-digit, three-digit and four-digit levels; differences among the 25-to-34, 35-to-44 and 45-to-54 age groups were relatively small. By gender, recent immigrant men consistently exhibited higher occupational match rates than women. The observed gender gap in the match rates narrowed by 57% at the four-digit level and 27% at the two-digit level after adjusting for differences in the covariates in Table 1, including the presence of children aged 18 or younger in the family.^{Note 3}

Education and language proficiency also played important roles. Higher educational levels were associated with higher occupational match, with those holding degrees above the bachelor’s level showing the highest rates. While this association held at all three NOC digit levels, it was particularly pronounced at the two-digit level. Regarding knowledge of official languages, recent immigrants who knew only English had the highest occupational match rate compared with immigrants reporting other official language profiles. However, after adjusting for the covariates in Table 1, the differences in match rates between immigrants who spoke only English and those who spoke only French or were bilingual were no longer statistically significant.

Occupational match further varied by immigration category. Economic immigrants had higher occupational match rates than family immigrants, with Canadian Experience Class (CEC) immigrants having the highest occupational match rates among economic immigrants. However, after adjusting for differences in Canadian work experience before admission, immigrants admitted through the CEC and the Federal Skilled Worker Program exhibited similar occupational match rates at the NOC two-digit and three-digit levels, while differences in match rates between CEC and Provincial Nominee Program immigrants were substantially reduced. These results suggest that Canadian work experience before admission is the key factor underlying group differences by immigration class in occupational match rates among economic immigrants.

Patterns by source country reveal a notable contrast. Immigrants from more developed countries such as the United States, the United Kingdom and France had significantly higher occupational match rates compared with those from other top source countries. These three countries also share one of Canada’s official languages. Immigrants from the Philippines tended to have the lowest match rates at all three NOC levels, even after adjusting for group differences in other covariates in Table 1.

Pre-admission Canadian work experience was associated with a substantial difference in occupational match rates. Recent immigrants with previous Canadian work experience had much higher occupational match rates than those without such experience, by 10 percentage points at the NOC four-digit level and 12 percentage points at the two-digit level. These differences remained unchanged even after adjusting for other covariates in Table 1. These results align with earlier research showing that pre-admission Canadian work experience involves both employer selection, which may improve the match between immigrants’ skills and employers’ needs, and self-selection, as some less successful temporary foreign workers may choose not to pursue permanent residency (Hou & Bonikowska, 2018; Lu & Hou, 2020).

Recent immigrants with previous Canadian study experience were observed to have slightly higher occupational match rates than those without such experience. However, this relationship was reversed once differences in pre-admission Canadian work experience and other sociodemographic characteristics were accounted for in the multivariate analysis. Earlier research similarly finds that former international students without Canadian work experience do not perform better in the labour market after obtaining permanent residence than other immigrants (e.g., Crossman & Hou, 2022).

Match rates by intended occupation

The match rates varied substantially across intended occupations (Chart 1). For instance, at the NOC two-digit level, professional occupations in natural and applied sciences had the highest match rate (57%), followed by professional occupations in business and finance (31%) and professional occupations in education services (29%). At the three-digit level, the highest match rates were seen for computer and information systems professionals (67%); professional occupations in nursing (46%); and auditors, accountants and investment professionals (35%). At the four-digit specific occupation level, registered nurses and registered psychiatric nurses had the highest match rate (45%), followed by software engineers and designers (37%) and information systems analysts and consultants (34%).^{Note 4}

Data table for Chart 1

Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1 , calculated using (appearing as column headers).

	Percent
Note: NOC = National Occupational Classification. Sources: Statistics Canada, Longitudinal Immigration Database and 2021 Census of Population.
Top NOC four-digit occupations
Registered nurses and registered psychiatric nurses	44.8
Information systems analysts and consultants	33.5
Software engineers and designers	36.6
Top NOC three-digit occupations
Computer and information systems professionals	66.5
Auditors, accountants and investment professionals	34.6
Professional occupations in nursing	46.2
Top NOC two-digit occupations
Professional occupations in natural and applied sciences	57.1
Professional occupations in business and finance	31.4
Professional occupations in education services	29.4

Groups more likely to move to lower-skilled occupations

Among recent immigrants who did not work in their intended occupations, 42% moved to a lower-skilled occupation at the NOC four-digit level, 46% at the three-digit level and 49% at the two-digit level. This tendency varied by immigrant sociodemographic characteristics. The variations by the selected covariates in the likelihood of moving to a lower-skilled occupation were broadly similar at the three-digit and four-digit levels after controlling for other individual characteristics in the logistic regression (Table 2).^{Note 5}

Age at admission and gender both played a role. Immigrants who were admitted aged 35 to 44 and 45 to 54 had a much higher likelihood of moving to lower-skilled jobs than younger immigrants, conditional on not working in their intended occupation. For instance, the gap in occupational downward mobility between those who were admitted aged 35 to 44 and those admitted aged 18 to 24 was 7 percentage points at the NOC three-digit level and 8 percentage points at the four-digit level. Immigrant women were slightly more likely than men to move to lower-skilled jobs.

Education and official languages also mattered. Recent immigrants with a higher educational level were less likely to move to lower-skilled jobs when changing occupations. For instance, immigrants with a high school education or less were 10 percentage points more likely to move to a lower-skilled occupation at the NOC four-digit level than immigrants with a bachelor’s degree. By official language knowledge profile, those who knew only French were the most likely to move to lower-skilled jobs. Across top source countries, immigrants from the United States, France and the United Kingdom were the least likely to move to lower-skilled jobs.

There were some moderate differences by immigration class. Immigrants admitted through the Federal Skilled Worker Program tended to have a higher likelihood of moving to a lower-skilled occupation than other economic immigrants when they did not find a job matching their intended occupations.

When changing occupations, recent immigrants without previous Canadian work experience had a higher probability of moving to lower-skilled jobs at either the three-digit or four-digit level, by about 24 percentage points compared with those with such work experience. Immigrants without previous Canadian study experience showed a slightly larger (at the three-digit level) or smaller (at the four-digit level) probability of moving to lower-skilled jobs, compared with those with previous Canadian study experience.

Earnings outcomes associated with occupational match

The impact of occupational match on labour market outcomes was assessed by comparing employment income in 2020 between immigrants who worked in their intended occupations (stayers) and those who did not (movers).^{Note 6} Table 3 presents median employment income for occupational stayers and movers, disaggregated by sociodemographic characteristics.^{Note 7}

The results showed that occupational stayers had consistently higher median employment incomes than movers. Overall, occupational stayers earned 49% more than movers. These results may be associated with an alignment between immigrants’ skills and labour market demand, although other factors such as industry wage structures and credential recognition may also contribute. Those who did not work in their intended occupations may have done so involuntarily and had to move to occupations with lower pay.

By education, the gap between occupational stayers and movers was larger for immigrants with a bachelor’s degree or above than for immigrants with lower educational levels. This finding suggests that immigrants with a higher level of education may experience greater earnings losses when their skills are not fully utilized, reflecting their higher opportunity cost of occupational downward mobility.

The gaps between occupational stayers and movers were larger for immigrants admitted at older ages, those who did not speak an official language at admission and those without previous Canadian work or study experience. These immigrants may have more difficulties in finding relatively high-paying employment when they could not work in their intended occupations.

Across major source countries, immigrants from the United Kingdom, France and the United States tended to have smaller earnings gaps between occupational stayers and movers, largely because movers from these countries were also able to secure relatively high-paying jobs. For a different reason, Filipino immigrants exhibited the smallest earnings gap between occupational stayers and movers: even among occupational stayers, average earnings were relatively low. This finding likely reflects the fact that a large portion of their intended occupations were in lower-skilled categories.^{Note 8}

Conclusion

The results of this study provide a broad picture of occupational match among immigrants admitted from 2010 to 2020. The findings show that a minority of recent immigrants (about one in five) were working in their intended specific occupation (NOC four-digit level) in 2021, although match rates rose to around one in three at the broader two-digit occupational level. Occupational match varied systematically across sociodemographic groups: it was higher for economic-class immigrants, those with a graduate education, those from more developed source countries and those with pre-admission Canadian work experience. These patterns suggest that selection mechanisms and previous exposure to the Canadian labour market both play important roles in shaping immigrants’ ability to work in their intended jobs.

At the same time, the results point to substantial downward occupational mobility among those who did not match with their intended occupation, with many moving into lower-skilled jobs. Older immigrants, those with weaker official language profiles and those without previous Canadian work experience were especially likely to move to lower-skilled occupations after admission.

These occupational shifts mattered greatly for economic outcomes: across almost every subgroup, immigrants who stayed in their intended occupation earned substantially more than those who moved to a different occupation—nearly 50% more on average. The significantly lower employment income of occupational movers indicates that many experienced downward mobility, taking lower-paid jobs. Larger earnings gaps between occupational stayers and movers among highly educated immigrants underscore the significant economic cost of skill underutilization. Meanwhile, smaller gaps among certain source countries highlight how occupational structures and labour market segmentation both shape the returns to occupational matching.

Taken together, these findings have important social and policy implications. First, they reinforce the value of previous Canadian work experience pathways, which appear to improve occupational alignment and reduce the risk of downward mobility. Second, low occupational match and associated earnings gaps among movers highlight challenges in labour market integration. This is likely attributable to limited opportunities in their intended occupations or difficulty securing employment in their desired fields. Identifying key factors behind these transitions is crucial for developing strategies to support smoother workforce integration. Third, given large variations in match rates across intended occupations, immigration selection strategies targeting specific intended occupations may be less effective if match rates in those occupations are low. Finally, the earnings penalties associated with occupational mismatch indicate that improving occupational match is not only a matter of individual economic success but also essential for maximizing the broader labour market contributions of immigrants.

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