Economic Research Paper

Table of contents:

1. Introduction
2. The definition of a topic
3. Researches review
4. Economic theory
5. Statement of the implications of economic analysis
6. Test of the hypothesis
7. Discussion of the results
8. Works cited

 

Introduction

Basically, the position of immigrants in Canada is one of the most important issues which many researchers attempt to study, including M. Adamuti-Trache and R. Sweet, the authors of “Exploring the Relationship Between Educational Credentials and the Earning of Immigrants”. On the contemporary labour market, education plays a particularly significant role because the share of high tech industry and knowledge-based sector of Canadian economy grows steadily. In this respect, it is important to underline the education becomes one of the major criteria that actually opens the way for immigrants to Canada. At the same time, it is obvious that immigrants from different countries of the world have different background, including education, professional level and experience, language proficiency, etc. In addition, there are considerable biases and stereotypes that dominate on Canadian labour force market, which affect the position of immigrants as well as local workers. At this point, it is possible to name traditional issues which lead to the inequality and even discrimination of employees in Canada, such as gender or origin of applicants. It is important to underline that these issues affect not only immigrants but also native, Canadian employees. In such a situation, it is extremely important to research the interrelation between education and employment opportunities of immigrants in Canada, especially in the context of a significant contribution of highly qualified immigrants in the development of Canadian economy.

The definition of a topic

Obviously, nowadays, education produces a profound impact on the level of income of Canadians and on their social status. At the same time, the position of immigrants at this point is often inferior compared to native Canadians because immigrants are particularly susceptible to the impact of biases dominating in Canadian society. Moreover, initially, immigrants have lower opportunities to get job that could be equal to that of a native Canadian because of the different educational level and the lack of Canadian experience.

In such a context, M. Adamuti-Trache and R. Sweet focused their attention on the relationship between educational credentials and the level of earnings of immigrants. To put it more precisely, they basically researched impact of the educational level of immigrants on their opportunities in Canada and their level of income. It is worth mentioning the fact that researchers took into consideration a variety of factors that could influence the level of earnings of immigrants which were directly or indirectly related to education. In fact, they researched the level of earnings of immigrants having different educational level, paying a particular attention to immigrants with the high level of education and high qualification. In addition, they studied the validity of diplomas of different countries in Canada.

What is meant here is the fact that they attempted to identify countries and regions which education is the most relevant in Canada. In other words, they attempted to reveal the dependence between the educational background of immigrants, namely countries where they received their education, and their employment opportunities and level of income in Canada. In such a way, the researchers attempted to trace the dependence between the origin of education and the level of earnings of immigrants in Canada.

Another important factor that the researchers took into consideration was the educational level of immigrants, which was traditionally defined by years of schooling. In such a way, they attempted to assess the extent to which educational level can affect employment opportunities and level of income of immigrants in Canada.

At the same time, they also researched fields of studies in which immigrants are most competitive in Canada and in which they have larger opportunities to get higher income and approach native Canadians. Basically, the researchers point out that immigrants tend to engineering and applied science as well as math, physics and medicine that differ them considerably from native-born Canadians who are more likely to have teaching degree. In such a way, immigrants naturally have lower opportunities to get employed and have better perspectives in field where the position of native Canadians is particularly strong, while in other fields they may compete with native Canadians and, therefore, have higher level of income.

Furthermore, the researchers also take into consideration such factor as the language competency. In fact, M. Adamuti-Trache and R. Sweet emphasize the significance of the language competency for the larger work opportunities for immigrants, though, on the other hand, they argue that language competency does not always play a crucial role in the level of earnings of immigrants in Canada. It should be pointed out that the researchers rather view language competency as a secondary factor, especially compared to education credentials, origin of education and similar factors. Nevertheless, they agree that the low language competence in English and French decreases the competitiveness of immigrants on the national labour market. At the same time, the formation of language competency and language proficiency can facilitate the improvement of the position of immigrants on Canadian labour market.

Finally, researchers underline the fact that work experience may also play an important role in the level of earnings of immigrants in Canada. In a way, this factor may be viewed in the context of the education of immigrants because practical experience is an essential part of the professional development and education of specialists. Naturally, immigrants may have different work experience and the difference may be quite significant if the mentality and traditions of work in the country, which immigrants originate from, differ consistently from standards, norms and traditions of Canadian labour market. At the same time, M. Adamuti-Trache and R. Sweet point out that the qualification and work experience of immigrants may be as important factors as their education in the process of their employment and level of earnings. It is worth mentioning the fact that the researchers indicate to the lower level of earnings of immigrants compared to native Canadians.

 

 

 

Researches review

Naturally, the research conducted by M. Adamuti-Trache and R. Sweet is not unique and there are a lot of other researches focused on the problem of immigrants and the relationship between their education and level of earnings.

In this respect, it should be said that the attention of researchers to this problem grows stronger as the importance of education and intellectual potential of employees increase. Specialist (Cohen and Granatstein, 122) underline that the rapid development of  new technology and dramatic changes that took place in the contemporary society as well as on the labour force market have increased the demand on well-qualified labour force consistently.

Basically, in recent years, Canada has focused on the admittance of immigrants that have high qualification and high educational level. This trend in Canadian immigration policy is determined by objective factors that influence the development of Canadian economy. In fact, some specialists (Cohen and Granatstein, 129) lay emphasis on the fact that Canada lack highly-qualified specialists and is practically unable to provide the national economy with the sufficient amount of such specialists in all fields. This is why Canada stimulates the immigration of highly-qualified specialists mainly. On analyzing the causes of such a situation in Canada, it should be pointed out that one of the possible reasons is the demographic situation in Canada.

Many specialists (Couture and Bosley, 112) indicate to the fact that Canadian population is gradually aging.

Consequently, the number of young people in Canada gradually decreases along with the aging of the nation. In such a situation, it is quite difficult to provide the national educational system and national economy with a large number of young people who could become well-qualified specialists simply because of the lack of the youth in Canada.

Moreover, some specialists (Couture and Bosley, 117) stand on the ground that the gap between the demand for highly-qualified labour force and the number of young people, who can get education and meet the existing demand in the national economy, will grow wider. Paradoxically, the major reason for the growth of the gap is the economic growth in Canada and technological advances that have progressed very fast in recent years. To put it more precisely, the rapid development of new technologies and scientific progress naturally increase the need of Canadian companies and Canadian economy at large in well-qualified specialists that are able to work in high-tech industries.

However, as the share of young people in Canadian population steadily decreases it gets more and more difficult to meet this need of the national economy. In such a context, immigration of highly-qualified specialists in Canada is not only important but simply necessary to make Canada keep pace with the progress of other well-developed countries and, therefore, remain competitive on the international market. The latter, in its turn, will provide the basis for the stable economic development and progress of Canada (Cohen and Granatstein, 147).

In such a situation, the education of immigrants and their qualification really play crucial role and may be determinant factors that can define the work opportunities of immigrants in Canada. However, it should be said that numerous researches (Wells, 31) have proved the fact that the level of earnings of immigrants is, as a rule, lower compared to native-born Canadians. Basically, the latter are in an advantageous position compared to immigrants.

In this respect, it should be said that M. Adamuti-Trache and R. Sweet underestimate a little bit the significance of language when they analyze the impact of this factor on the work opportunities and level of earnings of immigrants in Canada. In fact, some specialists (Cohen and Granatstein, 191) underline that language competency can often pose unsurpassable barriers on the way of immigrants to the successful professional career. To put it more precisely, they argue that the language proficiency is one of the most important factors because it facilitates consistently the integration of immigrants into the work of Canadian organizations as well as into the life of Canadian society at large.

In order to better understand the significance of language in such a context, it is necessary to refer to the researches of the organizational culture and interpersonal relationships within organizations (Couture and Bosley, 128). At this point, it should be said that language plays an extremely important role in the formation of positive interpersonal relationship within an organization. Naturally, in such a situation, language gaps or the lack of language competency leads to the inability of an immigrant to establish normal interpersonal relationship with other employees and administration of the organization. Basically, this leads to the exclusion of immigrants and decreases their job opportunities. Moreover, some specialists (Wells, 123) indicate to the risk of discrimination of immigrants and their exclusion from the life of the organization.

In this respect, it is worth mentioning that discrimination is another serious problem that affect the level of earnings of immigrants in Canada and that is often closely interrelated with the educational background and educational credentials of immigrants. What is meant here is the fact that immigrants from traditional sources of immigration, including such countries as Europe, the US, have larger opportunities to get better work and higher level of income compared to other immigrants, especially from countries of the third world (Cohen and Granatstein, 221). At this point, it is possible to speak about the prejudiced attitude in Canada to these immigrants. In addition, it is also necessary to remember about the educational origin of immigrants. It is not a secret that immigrants from Europe and the US are traditionally viewed as specialists whose educational level is comparable to the educational level of Canadians, while immigrants from developing countries, as well as countries of Eastern Europe, for instance, often face a biased attitude because of their educational origin (Wells, 149). As a result, they need to prove their high qualification, but still they have lower opportunities to get the equal level of earnings compared to native-born Canadians.

Finally, it is necessary to underline that many researchers (Wells, 104) indicate to the growing trend in Canadian immigration policy to attract younger people who have good education credentials and work experience. Basically, such category of immigrants is particularly perspective for Canada, taking into consideration current economic and demographic trends.

 

 

Economic theory

Returning to the research conducted by M. Adamuti-Trache and R. Sweet, it should be said that they conducted their researches on the basis of two economic theories. In fact, both theories used by the researchers emphasize the significance of human resources and education, which actually becomes one of the determinant factors that influences the level of earnings and perspectives of employees.

First of all, it should be said that one of the economic theories the researchers heavily rely on is the human capital theory. It should be said that this theory implies that investment in education is rewarded by increased earnings and improved working conditions (Adamuti-Trache and Sweet, 180). In actuality, the application of this theory seems to be quite logical in the research of the impact of education on the level of earnings and their relationship. In fact, on the basis of the human capital theory it is possible to find out the extent to which education or, to put it more precisely, investments of immigrants may be effective for them in regard to their work opportunities and perspectives as well as their level of income and conditions of work.

However, on analyzing the position of immigrants in Canada and the relationship between their education and the level of earnings in the context of the human capital theory, it should be said that, in order to make objective judgments concerning immigrants in Canada, it is necessary to take into consideration their past education and experience. What is meant here is the fact that it is necessary to correlate their investments in education in the country they originate from and where they have actually received their education and in Canada. It proves beyond a doubt that investment in education in other countries could be higher or lower compared to Canada. Therefore, the effectiveness of these investments will also differ since, as soon as immigrants arrive in Canada, they are initially in a disadvantageous position compared to Canadians, especially if they emigrated from a country of the third world. For instance, if a person arrives from the country of the third world, he/she initially has lower opportunities to get a good job, while his/her level of earnings is consistently lower compared to native-born Canadians. For instance, at average, M. Adamuti-Trache and R. Sweet estimate that female immigrants earn 65% of the level of earnings of Canadians (194) the same trend may be traced in regard to other immigrants. At the same time, it is necessary to remember that costs of higher education of an immigrant from a developing country are consistently higher compared to a native-born Canadian or an immigrant from the US or the UK. On the other hand, an immigrant from a developing country has lower level of earnings. As a result, it is possible to speak that in terms of human capital theory immigrants from developing countries are in a consistently worse, disadvantageous position compared to native-born Canadians and have a lower level of earnings.

Another theory M Adamuti-Trache and R. Sweet applied in their research was the social structural theory. Basically, this theory implies that labour force market is always affected by various social factors that influence the position of an individual on the market. In such a situation, educational credentials of an individual turn to be not very important. To put it more precisely, educational credentials are factors that cannot fully determine the position of an individual on the labour market. It should be pointed out that the social structural theory indicates to the importance of other social factors that affects the position of an individual on the labour market, such as gender, social position, race, and nativity (Adamuti-Trache and Sweet, 181).  In such a way, the position of immigrants on Canadian labour market should be affected by these factors too,

In actuality, it should be said that the social structural theory offers a larger view on the relationship between education and the level of earnings of immigrants in Canada compared to the human capital theory. Obviously, the social structural theory provides opportunities to take into consideration factors that cannot fail to affect the level of earnings of immigrants in Canada, while the focus on the relationship of education credentials and the level of earnings is insufficient to adequately assess and evaluate this relationship. It proves beyond a doubt that such factors as gender, social position, race and nativity do not only affect the level of earnings and work opportunities, but they also influence consistently education of immigrants.

In addition, the social structural theory provides an opportunity to view the position of immigrants on the labour market of Canada and the relationship between educational credentials and the level of earnings in a larger, socioeconomic and socio-cultural context. To put it more precisely, it is very important to take into consideration existing socio-cultural biases and prejudices which may affect the level of earnings of immigrants in Canada and which may not be directly related to educational credentials.

Statement of the implications of economic analysis

Basically, M. Adamuti-Trache and R. Sweet conduct their research in order to reveal the correlation between educational credentials and earnings of immigrants in Canada. At the same time, it should be said that they use previous researches as the basis for their own study. They admit the fact that the problem of the current position of immigrants on the labour market of Canada and their future work opportunities has been already researched by many specialists. At the same time, M. Adamuti-Trache and R. Sweet attempt to enlarge the study and focus specifically on the relationship between educational credentials and the level of earnings of immigrants in Canada.

To put it more precisely, they attempted to assess the future work opportunities and level of income of immigrants compared to their educational credentials.

In fact, this research is really important to conduct, taking into consideration the growing role of education in the contemporary business environment and economy at large. At the same time, such a problem is also worth researching in the context of the current immigration policy in Canada. To put it more precisely, the researchers emphasize that Canadian immigration policy is oriented on the admittance of immigrants that have good educational credentials and significant and positive work experience. In such a way, education and educational credentials become crucial factors that actually determine whether a person can immigrate to Canada or probably he/she will be denied to move to Canada.

Naturally, the research of the relationship between educational credentials and the level of earnings is important in terms of the explanation of the existing inequality on Canadian labour force market. In fact, from the beginning of their study, researchers suggested that educational credentials can affect the level of earnings and future work perspectives of immigrants in Canada. Consequently, the educational credentials could be viewed as a factor that should be taken into consideration in the development of national policies concerning the integration of immigrants into the socio-economic life of Canada. The latter fact is very important because educational credentials were often ignored by Canadian authorities in numerous programs targeting at the integration of immigrants in the life of local communities and, as a rule, educational and integrative programs were limited by cultural integration or language programs.

Test of the hypothesis

In order to arrive to reliable and adequate conclusions, the researchers naturally needed to test their hypothesis. In this respect, it should be said that M. Adamuti-Trache and R. Sweet used several variables to test their hypothesis.

Basically, the researchers attempted to use the variables to build profiles and examine the basis for earning differences between immigrants and native-born Canadians. In fact, the researchers used three major variables: the immigrant status, visible minority status, and gender (Adumati-Trache and Sweet, 186).

The choice of the variables is not occasional because the researchers took into consideration socio-cultural background of Canada and the variables they had chosen reflect the major biases of Canadian society that could influence the level of earnings and work opportunities of immigrants in Canada. The immigrant status plays an important role in the level of earnings of immigrants. At the same time, it also affects their work opportunities. As for visible minority status, it should be said that this variable is also quite important because it may affect the attitude of native-born Canadians to immigrants belonging to visible minorities that may decrease their level of earnings.

Finally, speaking about gender variable, it should be said that this variable is also very important because gender affects not only the position of immigrants but it is also an important issue for native-born Canadians. In this respect, it is worth mentioning the fact that the position of female in Canadian labour force market is worse compared to males in terms of the unemployment rate and position in the organizational hierarchy. Naturally, in such a situation, gender variable could not be ignored by the researchers and females constituted about a half of the subjects of the research conducted by M. Adamuti-Trache and R. Sweet.

Discussion of the results

On analyzing the research conducted by M. Adamuti-Trache and R. Sweet, it should be said that basically their results reveal quite a negative trend in relation to the position of immigrants in Canada. To put it more precisely, the researcher underline that, as a rule, immigrants’ level of earnings is lower compared to Canadians. In fact, practically on all levels and in all age groups immigrants’ level of earnings is lower. At the same time, the researchers explain such a trend by educational credentials and existing biases in Canadian society.

In this respect, it should be said that the researchers argue that immigrants from traditional sources of immigration, such as the US, for instance, are in a consistently better position than immigrants that have visible minority status.

Moreover, educational credentials of immigrants from the US and Northern Europe are comparable to educational credentials of native-born Canadians that naturally put these immigrants into better position compared to other immigrants that arrived from other countries and regions of the world.

At the same time, the researcher have revealed the fact that immigrant females proved to be more successful in traditionally male occupations, especially in such fields as physics, math, engineering and similar fields, than native-born Canadian females. Basically, the researchers explain such a position of female immigrants by the lower level of competition from the part of native-born Canadian females.

Moreover, the researchers underline that immigrants prove to be particularly successful and have higher level of earnings in the fields where the competition from the part of native-born Canadians is lower. It is important to point out that the researchers arrived to the conclusion that, as a rule, educational credentials and background of immigrants are of a low value in Canada as well as their work experience in their native country.

As a result, they conclude that the educational credentials of immigrants are not fully taken into consideration and the real potential of immigrants is not revealed or, at any rate, their work is not adequately rewarded. This is why the researchers insist on the necessity of the modification to the immigration selection criteria.