2 Measuring economic outcomes

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The economic outcomes of immigrants can be addressed using a host of different metrics and time frames. One can focus on poverty, earnings, employment or unemployment, although any single indicator captures only one aspect of economic well-being. Earnings are the most commonly used measure in Canadian research, but they ignore changes in employment rates. Employment rates capture changes in labour force involvement, but they tell us nothing about trends in earnings. Measures of low-income status are more comprehensive, because they incorporate change in all sources of income, but they focus on the bottom of the income distribution and fail to assess changes at the middle and the top. The process of labour market adaptation of immigrants varies across countries. Research by Antecol, Kuhn and Trejo (2006) shows that in Australia most assimilation occurs through employment adjustment, whereas in the United States it is primarily earnings that adjust. The United States tends to have more flexible wages than Australia. The research suggests that Canada is somewhere between these two countries, with immigrants' economic adjustment occurring through both employment and earnings.

In addition to employing mean earnings as the metric, more recent papers are focusing on the distribution of earnings of entering immigrants. They find that the earnings gap—between the native born and immigrants—is increasing more at the bottom than at the top of the earnings distribution, suggesting that a focus on low-income rates is desirable.

Beyond the metric used, the timeframe or segment of the immigrant earnings trajectory selected also affects the findings. Much of the recent Canadian research has focused on earnings during the first few years in Canada. Other research has focused on the earnings trajectory over the life course to determine if a 'catch-up' to earlier cohorts was likely. Finally, some research foregoes research on the entering immigrants themselves, but instead has focused on their children. This research asks if 'second-generation' immigrants are doing as well, economically, as their earlier counterparts, their parents or their Canadian-born colleagues. All of these time-frames are important in order to assess changes in the economic trajectories of immigrants.