The Shift in Canadian Immigration Composition and its Effect on Wages

Julien Champagne, Antoine Poulin-Moore and Mallory Long

No 2025-08, Discussion Papers from Bank of Canada

Abstract: We document recent changes in Canadian immigration, marked by an increasing prevalence of temporary residency. Using microdata from Statistics Canada's Labour Force Survey, we show that temporary workers' characteristics and nominal wages have diverged from those of Canadian-born workers. Between 2015 and 2024, temporary workers have become younger, less experienced and more likely to migrate from lower-income countries. As well, the shares of temporary workers in skilled occupations have declined moderately. Throughout this period, the average nominal wage gap between temporary and Canadian-born workers has more than doubled, widening from -9.5% to -22.6%. Further, we estimate Mincer regressions to assess how these evolving characteristics have contributed to the growing wage gap. Our findings show that this increase can be explained by observable characteristics. Our results suggest that aggregate nominal wages would have been, on average, 0.7% higher in 2023–24 had the characteristics of temporary workers remained unchanged over the past decade.

Keywords: Labour markets; Productivity (search for similar items in EconPapers)
JEL-codes: J20 J24 J61 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2025-05
New Economics Papers: this item is included in nep-inv, nep-lma and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:25-08

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