Explaining the deteriorating entry earnings of Canada's immigrant cohorts, 1966-2000

This paper contributes to the literature by estimating a more flexible empirical specification which nests all of the existing explanations, including changes in the country of origin composition of more recent cohorts, changes in the returns to foreign credentials and foreign experience, the scarring effects of entering Canada at different points in the economic cycle, and the effect of more gene [...] In addition, the cohort analysis requires that the immigrant sample be restricted to those who arrived in Canada between 1965 and 1999 and the native sample to those who entered the labour market in the period between 1965 and 1999. [...] Estimating equation (1) on a pooled sample of immigrants and natives, we can interpret the estimates of δj as the entry earnings of cohort j relative to the excluded cohort (usually the earliest), after controlling for years of experience and schooling. [...] Results from the standard specification The results from estimating specification (1) are presented in column 1 of Table 1. The cohort effect estimates indicate that the entry earnings of Canadian immigrants declined with each successive cohort throughout the period from the late 1960s to the early 1990s. [...] Given the improved labour market conditions of the 1990s and the efforts of policy makers to improve the selection process during the decade, it is perhaps surprising that the reversal has not been larger.