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Two-Step Canada Immigrants Outshine One-Step Newcomers in Earnings

Austin Campbell



Two-Step Canada Immigrants

Canada Immigration News presents an insightful analysis of Statistics Canada’s recent Economic and Social Reports publication, shedding light on the financial trajectories of one-step and two-step economic immigrants.

Statistics Canada’s latest report, published on January 24, delves into the earning dynamics of immigrants arriving in Canada through different pathways. The study reveals that two-step Canada immigrants consistently experience higher annual earnings compared to their one-step counterparts, even after accounting for sociodemographic differences and a decade post-initial arrival.

Two-Step Immigration Process: A Winning Strategy

In the two-step immigration process, candidates are selected from a pool of temporary foreign workers (TFWs) and international students with Canadian work experience. This strategic selection process has become a game-changer, significantly impacting the economic outcomes of immigrants landing in Canada.

The report underscores that immigrants with high-paying and high-skilled jobs as TFWs outperform their counterparts selected directly from abroad. This advantage, however, doesn’t uniformly apply to low-wage or low-skilled two-step immigrants.

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Factors Driving Success

Two key factors contribute to the success of two-step immigrants.

  • Firstly, the multiple-selection process allows employers to directly assess TFWs’ skills and qualities, creating a better match with labor market demands. This aligns with the observed adjusted earnings difference, suggesting a more efficient skill-market fit.
  • Secondly, the advantage of gaining early Canadian work experience gives two-step immigrants a head start in the labor market. This experience, acquired before permanent residency, positions them for higher earnings compared to one-step immigrants without prior exposure to working in Canada.
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Earnings Trends Over Cohorts

Analyzing data across arrival cohorts, the report notes that while two-step immigrants consistently earn more than one-step immigrants, the earnings gaps have narrowed over the years. Changes in admission program types and the introduction of mandatory pre-migration educational credential assessments in 2013 have influenced these trends.

Challenges and Considerations

While the two-step immigration strategy proves successful, the report highlights potential challenges. Low-skilled or low-paying jobs among TFWs could lead to lower and slower earnings growth, raising concerns about working conditions. The influx of TFWs and international students in the labor force may also impact domestic workers’ wages and hinder long-term market competitiveness.

The report concludes by emphasizing the need for a careful examination of the benefits and challenges associated with the two-step immigration selection, urging a balanced approach to address the evolving needs of the labor market and the broader economy.

Note: This analysis, based on the Longitudinal Immigration Database, focuses on economic principal applicants aged 25 to 54 in the year of arrival

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