How language skills predict earnings in Canada

Canada’s Express Entry system requires that all candidates have a minimum language ability corresponding to a level 7, 5, or 4 (depending on the specific program) under the Canadian Language Benchmark (CLB) (for English) or the Niveaux de compétence linguistique canadien (NCLC) (for French).

Though Canada has demographic and integration reasons to require that newcomers demonstrate these language abilities, they also act as powerful predictive factors of immigrant success in Canada (which is a key reason why they are included under the Comprehensive Ranking System (CRS)—Canada’s scoring system for assessing immigration candidates).

A recent study by Statistics Canada helped illuminate the effects of language ability on immigrant income, by correlating the scores of approved language tests (for Canadian immigration) with the economic outcomes of immigrants accepted under the Express Entry system, in the years following their landing in Canada.

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How is an immigrant’s language ability assessed under the Express Entry system?

Newcomers under the Express Entry must take approved language tests to determine their ability in at least one of Canada’s two official languages (English and French). These tests assess a candidate’s reading, writing, speaking, and listening abilities in a language.

To be eligible under Express Entry’s three programs (the Canadian Experience Class (CEC), the Federal Skilled Worker Program (FSWP), and the Federal Skilled Trades Program (FSTP)), candidates must meet different language ability criteria to be eligible for the respective stream:

Under the CEC candidates must receive at least a CLB or NCLC level 7 in all language abilities—if their job meets a National Occupation Classification (NOC) Training Education Experience and Responsibilities (TEER) 0 or 1. If their occupation is a NOC TEER level 2 or 3, they must meet a CLB or NCLC level 5 in all language abilities;

Under the FSWP candidates must receive at least a CLB or NCLC level 7 in all language abilities; and

Under the FSTP candidates need a CLB or NCLC level 5 for speaking and listening, and level 4 in reading and writing.

How did differing language abilities impact immigrant success in the years after initial landing?

The study by Statistics Canada found that all four tested language abilities had positive effects on an immigrant’s income in the years after landing, with the effect increasing as the tested language ability of a newcomer increased (in all four abilities).

Among these language abilities, reading seemed to have the strongest effect on earnings—however, the differences between the effect of individual language abilities on earnings were largely the same with little difference between them.

For example, the study found that immigrants with a level 10 (CLB or NCLC) reading ability earned 25% more when compared to immigrants with a level 7. Immigrants with a level 10 listening ability earned 18% more than their level 7 counterparts; increased speaking ability (using the same two levels as a comparison) earned newcomers 19% more while writing ability earned 22% more. The study notes that clear differences in earnings for all abilities only appeared from level 6 or above in each skill, with no noticeable difference between CLB or NCLC levels 5 to 6 in the earnings of newcomers.

However, none of these language abilities, alone or together had predictive ability in determining whether an immigrant could find employment, suggesting that other factors assessed in the CRS likely had a larger impact on finding work in Canada after landing.

How does language ability stack up against other factors assessed under the CRS?

Canada’s CRS assesses multiple human capital factors of an immigration candidate to determine how successful they are likely to be in settling and integrating into Canadian society. Specifically, these are:

• Language ability;
• Pre-landing Canadian work experience;
• Education; and
• Age.

According to the results of this study, language ability was one of the most important human capital factors in predicting immigrant success—even when compared to other factors.

Specifically, tested language ability was as important as pre-landing Canadian work experience (thought to be the most impactful factor in short-, medium-, and long-term earnings of newcomers). In addition, language ability was found to be “much more important” than education level and age at immigration in predicting the earnings of newcomers in the initial years after landing.

In addition, language abilities helped explain differences in immigrant earnings based on nationality. Though some differences in earnings are usually observable based on an immigrant’s source country, when language abilities were standardized across these groups, differences in earnings were greatly reduced—indicating that much of this difference to begin with could likely be explained by varying proficiencies in English or French.

Language ability was even able to standardize differences in economic outcomes among Express Entry’s three programs. This is significant, as traditionally CEC candidates tend to perform the best economically in Canada (thought largely to be due to their abundance of pre-landing Canadian work experience, and Canadian education)—however when controlling for language ability the difference in earnings between candidates in the CEC, FSTP, and FSWP reduced by two thirds—indicating that language ability was again significant in earnings in years after landing.

How can newcomers use this information?

Based on the results of this study, newcomers to Canada would do well to invest heavily into their language abilities—not just in establishing writing, reading speaking, and listening capacity, but also in continually developing and refining their language skills—especially if English or French is their second language. Doing so could have an outsized effect on their earnings shortly after landing in Canada; a result which could subsequently snowball into greater success throughout their Canadian immigration journey.

Notably, the study did have limitations that newcomers may want to consider—specifically the focus on Express Entry candidates, and lack of consideration towards Provincial Nominee Program (PNP) candidates may skew incomes and effects of language proficiency.

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