Outcomes of STEM immigrants in Canada and the U.S.

Shelby Thevenot
Published: November 1, 2020

Immigrants make up a large share of university-educated workers in STEM fields in both Canada and the U.S., and a recent study looked into which country sees better outcomes for immigrants in these sectors.

The Statistics Canada study looked at the economic outcomes of immigrants age 25 to 64 who had at least a bachelor's degree in a STEM— science, technology, engineering, mathematics—field. In Canada, the data is from 2016, while U.S. data is from 2015 to 2017.

In general, U.S. immigrants saw better outcomes.

In both countries, immigrants with at least a bachelor's degree were twice as likely as the native-born population to have studied in a STEM field. They were also three times as likely to have studied engineering, computer science, and math.

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In terms of occupational outcomes, more than half of STEM-educated immigrant workers in both countries held non-STEM jobs. The study said this was, generally, not a big issue because STEM skills are valued in many other occupations. However, it becomes an issue when STEM-educated immigrants in Canada end up  working at jobs that do not require a university education. In Canada, only 20 per cent of STEM educated immigrants working outside of the field are actually working a job that requires a university degree. In the U.S., it is 48 per cent.

Among all STEM-educated workers, immigrants earned 25 per cent less than their Canadian-born counterparts. There was no earnings gap between immigrants and U.S.-born workers.

Even within the Canadian STEM field, immigrants who found work earned 17 per cent less than Canadian-born individuals. In the U.S., immigrants earned about 4 per cent more than their native-born counterparts.

STEM-educated immigrants who did not find a job in the field earned about 34 per cent less than Canadians with the same education. The wage gap was narrower in the States, with immigrants earning about 7 per cent less.

Why are outcomes better in the U.S.?

Statistics Canada offers five possible explanations, though little research has been done on this question.

U.S. is first choice for many high-skilled immigrants

It may be that the skills of STEM-educated immigrants entering the U.S. are higher on overage than those entering Canada.

The study referenced a paper that examined the wage gap between immigrants and native-born workers in Australia, Canada and the U.S. It found significant earning gaps in Australia and Canada compared to the U.S. The authors said the tendency for highly-skilled immigrants to choose the U.S. over other countries was a primary factor in their better relative earnings outcomes in the U.S.

More STEM-educated immigrants in Canada

A higher percentage of Canada's STEM-educated workforce are immigrants compared to the U.S. The number of STEM-educated immigrants who entered Canada rose significantly in the 1990s in response to the high-tech boom, and has remained at high levels since. Canada does not face a general shortage of STEM workers, the study says.

When there's an abundance of workers, employers may tend to hire STEM graduates from universities that they are familiar with, and who have experience from countries with similar economies to Canada.

Different immigrant selection processes

In order to immigrate to the U.S. as a skilled worker, immigrants typically already have a job offer when they arrive, or they are international students who can be interviewed by prospective employers in the country. Immigrants who entered the U.S. contingent on job offers were more likely to get skilled jobs. Those who entered on a student, trainee, or temporary work visa, had a significant advantage over the native-born population in wages, patenting and publishing. Much of this advantage was due to their comparatively higher levels of education.

Canada's points-based immigration system, which has been in use since the 1960s, selects economic immigrants based on their human capital. These days, the Express Entry system ranks candidates based on factors like education, work experience, age, and language ability. The highest-scoring candidates get invited to apply for permanent immigration. Though candidates can get extra points for having a job offer, in some cases, it is not required in order to immigrate to Canada.

Canadian employers play a larger role in immigrant selection in the Canadian Experience Class (CEC) federal immigration program, as well as many Provincial Nominee Programs (PNP), than compared to the Federal Skilled Worker Program.

The study found that STEM-educated immigrants that immigrate through the CEC do relatively well compared to others, and those who go through the PNP typically have the poorest outcomes. One major difference is that the CEC requires immigrants to have at least one year of skilled work experience in Canada, whereas the PNP is more varied, and includes pathways for low-skilled and medium-skilled workers to become permanent residents.

Differences in country of education

Country of education is one of the most important determinants of immigrant earnings, along with language and race or visible minority status, the study says.

Country of education may differ significantly among STEM-educated immigrants in Canada and the U.S. STEM immigrants educated in non-Western countries do not do as well, economically, as others. The study suggest this is for a number of reasons, for example, the quality of education may be lower, or perceived to be lower. In the absence of a shortage of STEM workers, employers may prefer to hire those educated in Western counties. Also, some credentials are not recognized by professional associations in the host country, either for valid or invalid reasons, and this may prevent immigrants from developing countries from getting STEM jobs. Language or cultural issues may also prevent immigrants from being able to use their STEM education. Discrimination may also be a factor.

Other factors unrelated to immigration policy

Factors unrelated to immigration policies may also contribute to better outcomes of STEM-educated immigrants in the U.S., for example, the U.S. industrial structure may result in a higher demand for STEM-educated workers in comparison to other countries.

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