August 30, 2018 – With Canadian post-secondary institutions increasingly searching for tuition and talent from foreign students, monitoring their labour-market performance has critical implications for education and immigration policy, according to a new report from the C.D. Howe Institute. In “Comparing Outcomes: The Relative Job-Market Performance of Former International Students” authors Mikal Skuterud and Zong Jia Chen compare the job-market performance of former international students (FISs) who studied in Canada with that of foreign-born-and-educated graduates, as well as their Canadian-born-and-educated counterparts.
The results show FISs outperform foreign-born-and-educated immigrants by a substantial margin, but underperform Canadian-born-and-educated graduates from similar post-secondary programs. The authors also find evidence of a deterioration in FIS outcomes relative to both comparison groups.
Combining data from Canada’s National Graduate Survey and Labour Force Survey, the authors compare the labour-market performance of former international students who studied at Canadian institutions through the first decade of the 2000s to their Canadian born-and-educated (CBE), as well as to their foreign-born-and-educated (FBE) counterparts entering the Canadian labour market at the same time.
“The FIS performance gaps we identify relative to the Canadian-born-and-educated comparison group are modest,” says Skuterud. “We find essentially no shortfall in the average earnings of male FISs and CBE post-secondary graduates and only small gaps for women when we exclude education level and field of study.”
However, when they compare FIS and FBE graduates from similar academic programs, the gaps become larger and tend to be largest for women with college diplomas in fields outside of math and computer science and for Chinese men and South-Asian women.
The contribution of the analysis is threefold.
- First, in comparing FIS and FBE immigrants, the authors obtain evidence that giving preference to Canadian-educated applicants in the Express Entry immigration system is optimal.
- Second, in comparing FISs with CBE individuals graduating from similar academic programs, the results are consistent with FISs experiencing job search frictions, discrimination, and language difficulties, thereby requiring better immigrant settlement policies.
- Finally, with three cohorts of FISs spanning the first decade of the 2000s, Skuterud and Chen find some evidence of a deterioration in the labour-market performance of FISs as post-secondary institutions and governments have reached deeper into foreign student pools to meet their student and immigration demands. They argue that this deterioration is most consistent with a trade-off that has occurred, as the quality and supply of international students has not kept pace with the growth in demand.
“The critical question for policymakers is to what extent these gaps reflect pre-market differences in labour-market productivity, such as English/ French language disparities, as opposed to market challenges due to weaker job-search networks or employer discrimination,” Skuterud says. “Although the driving factors have very different implications for policy, identifying their relative importance is extremely difficult.”
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.
For more information please contact: Mikal Skuterud, Professor of Economics at the University of Waterloo or Laura Bouchard, Communications Coordinator, C.D. Howe Institute at 416-865-1904 or firstname.lastname@example.org