IMDB 2008 Core Report – National Portrait of Immigrant Outcomes: 2001-2008 Employment Earnings

Appendix B: IMDB 2008 research series — technical notes

Data sources

The Longitudinal Immigrant Database: The Longitudinal Immigrant Database (IMDB) combines administrative records on immigration with taxation information from the Canada Revenue Agency to create a comprehensive source of data on the labour market experiences and income of the immigrant population. The IMDB brings together three different data sets: the “confirmation of permanent residency” (from CIC), Personal income tax returns (the T1) and Statement of Remuneration Paid (the T4—a document issued by an employer to an employee), the latter two sources from Canada Revenue Agency. These three sources are reorganized into one database to facilitate research on economic integration and secondary migration of the landed immigrant population in Canada. Immigrant tax filers contained in the IMDB are linked via their landing record to the taxation system. Immigrants who do not file an income tax return (children for example), or for whom the link between the immigration and tax system failed, are absent from the database. For all immigrants between 1980 and 2007 the overall linkage rate between the immigration records and taxation records is 65%. This rate varies by immigration category.

The period of landings covered by the IMDB is 1980 to 2007; however, currently a 16-year rule applies to immigrants identified in the database. This means that the IMDB follows an immigrant for a maximum of 16 years after their first appearance in the database. Generally, an immigrant appears for the first time in the IMDB one year after arrival or the same year they landed.

IMDB does not cover the entire immigrant population or experience since it does not include all immigrants (only those who file an income tax return). For this reason, an examination of the capture rate, the proportion of the immigrant population that is included in the IMDB, is of interest. Details of the capture rate for the various immigrant categories are provided in “Additional Notes”.

Research Data Mart: Landings data are drawn from the Research Data Mart. The RDM consists of a collection of data products (including Facts and Figures) which are created based on business rules established by Citizenship and Immigration Canada’s Research and Evaluation branch. These data products, derived from CIC administrative data systems which have been converted into analytical data, are used for evaluation, program monitoring, policy analysis, research, and reporting for internal and external clients such as other government departments, provinces and territories.

Special tabulations from the Canada Revenue Agency: Average Canadian employment earnings (used as a benchmark throughout the document) for this analysis are derived from special tabulations from the Canada Revenue Agency. The special tabulations include only those aged 15 and over.

Glossary of terms and concepts

Average employment earnings and average entry employment earnings: Average employment earnings are defined as the total employment earnings (before income tax) of immigrants aged 15 and over divided by the total number of immigrants aged 15 and over who reported earnings from an employer in a particular tax year and filed an income tax return. These immigrants received a T4, a document issued by an employer to an employee. The average entry employment earnings are defined as the average employment earnings during the immigrants’ first year after landing. Employment earnings are adjusted using Statistics Canada’s Consumer Price Index (CPI), and can be calculated by landing cohort, immigration category, sex and other variables. In this report, all employment earnings figures are adjusted to 2008$. The first year after landing is often described as “years since landing=1” or YSL=1. Growth of employment earnings in subsequent years are often examined through the lens of YSL=3 or YSL=5 (i.e. three or five years after landing). Earnings from investments and government transfers such as employment insurance and social assistance are not included. Those who are self-employed would only be included if they have a T4, which could occur for those who are consultants.

Business immigrants: Permanent residents in the economic immigrant category selected on the basis of their ability to establish themselves economically in Canada through entrepreneurial activity, self-employment or direct investment. Business immigrants include entrepreneurs, self-employed people, and investors.

Canadian average employment earnings: The Canadian average employment earnings used in this analysis is an average of the employment earnings of all tax filers in Canada aged 15 and over who filed an income tax return. Canadian average employment earnings are derived from special tabulations from the Canada Revenue Agency. For the provincial analyses, provincial average employment earnings are reported for all taxfilers in the province and calculated in the same way.

Capture rate: The capture rate is a calculation of what proportion of immigrants are included in the IMDB.

Category: Immigration categories are shown for the three main groups of permanent residents—family class, economic immigrants, and refugees—as well as for “other” immigrants who do not qualify in any of these categories.

Economic immigrants: Permanent residents selected for their skills and ability to contribute to Canada’s economy. The economic immigrant category includes skilled workers, business immigrants, provincial or territorial nominees, live-in caregivers and Canadian Experience Class.

Economic spouses and dependants: These include spouses, partners, common-law partners, and dependent children of economic immigrant principal applicants who are listed as such on the application.

Employment earnings gap: The proportion of immigrant employment earnings relative to the average of the group being compared.

Entrepreneurs: Economic immigrants in the business immigrant category who are selected on the condition that they have managed and controlled a percentage of equity of a qualifying business for at least two years in the period beginning five years before they apply, and that they have a legally obtained the required personal net worth. They must own and manage a qualifying business in Canada for at least one year in the three years following arrival in Canada.

Family class: Permanent residents sponsored by a Canadian citizen or a permanent resident living in Canada who is 18 years of age or over. Family class include the following immigration categories: spouses and partners (i.e., spouse, common-law partner or conjugal partner); parents and grandparents; and others (i.e., dependent children, children under the age of 18 whom the sponsor intends to adopt in Canada, brothers, sisters, nephews, nieces, and grandchildren who are orphans under 18 years of age, or any other relative if the sponsor has no relative as described above, either abroad or in Canada).

Government-assisted refugees: Permanent residents in the refugee category who are selected abroad for resettlement to Canada as Convention refugees or members of the Convention Refugees Abroad Class who receive resettlement assistance from the federal government.

Humanitarian and compassionate considerations: Permanent residents who are humanitarian and compassionate cases with or without sponsorship and sponsored humanitarian and compassionate cases outside the family class.

Immigrants: People who have been granted permanent resident status in Canada. Permanent residents have all the rights guaranteed under the Canadian Charter of Rights and Freedoms but they do not have the right to vote in elections.

Incidence of employment earnings: The incidence of employment earnings is the share of immigrants with employment earnings of the total number of immigrants who filed an income tax return in a particular year. It is expressed as a percent and is calculated as the number of immigrants aged 15 and over who reported earnings from an employer (they receive a T4) divided by the total number of immigrants aged 15 and over who filed an income tax return in a particular year. Incidence of employment earnings can be calculated by landing cohort, immigration category, sex and other variables.

Investors: Economic immigrants in the business immigrant category who are required to make a substantial investment in Canada that is allocated to participating provinces and territories for economic development and job creation.

Live-in caregivers: Persons granted permanent resident status as economic immigrants after their participation in the Live-in Caregiver Program. This program brings temporary foreign workers to Canada as live-in employees to work without supervision in private households to care for children, seniors, or people with disabilities.

Occupational groups NOC: The National Occupational Classification (NOC) is the nationally accepted categorization of occupations in Canada. It organizes over 40,000 job titles into 500 occupational group descriptions. The NOC provides a standardized framework for organizing the world of work in a coherent system. It is used to manage the collection and reporting of occupational statistics and to provide understandable labour market information. IMDB uses the 2001 NOC.

The two digit NOC code is an aggregation of more detailed three and four digit groups. There are 26 two digit NOC groups that roll-up the 500 detailed groups but this report only includes the ten largest in terms of immigration. These are:

01
Management-business and financial administration
06
Management-sales and service
11
Professional occupations in business and finance
12
Skilled administrative and business occupations
21
Professional occupations in natural and applied sciences
22
Technical occupations related to natural and applied sciences
31
Professional occupations in health
41 
Professional occupations in social science and education
51
Professional occupations in art and culture
62
Skilled sales and service occupations

For more information about the NOC please visit HRSDC’s website.

Other immigrants: Permanent residents in the other immigrant category include post-determination refugee claimants in Canada, deferred removal orders, retirees (no longer designated under IRPA), temporary resident permit holders, H&C considerations, and people granted permanent resident status based on public policy considerations.

Principal applicants: Permanent residents identified as the principal applicant on their application for a permanent resident visa for themselves and their accompanying spouse and/or dependants. For individuals or families applying to immigrate to Canada in the skilled worker category, only the principal applicant is assessed on the basis of selection criteria in place at the time of the application.

Privately sponsored refugees: Refugees who are selected for resettlement in the Convention refugees abroad class, the source country class or the country of asylum class and who are privately sponsored by organizations, individuals or groups of individuals.

Provincial or territorial nominees: Economic immigrants selected by a province or territory for specific skills that will contribute to the local economy to meet specific labour market needs. Provinces and territories that have agreements with Citizenship and Immigration Canada are allowed to nominate persons who wish to settle in that province.

Public Policy Considerations: Public policy considerations are designed to facilitate processing of individuals in similar circumstances as the H&C considerations, all of whom must meet specific eligibility criteria. Although public policies have been used in times of crisis to process individuals, they are not necessarily restricted to humanitarian and compassionate circumstances.

Refugees: Permanent residents in the refugee category include government-assisted refugees, privately sponsored refugees, refugees landed in Canada and refugee spouses and dependants.

Refugees landed in Canada: Refugees who have had their refugee claims accepted and who subsequently applied for and were granted permanent resident status in Canada. With the introduction of IRPA, this group is referred to as “Protected persons in Canada”.

Self-employed: Economic immigrants in the business immigrant category selected on the condition that they can, and intend to, create their own employment in Canada and contribute significantly either to the Canadian economy or to the cultural or athletic life of Canada.

Skilled workers: Economic immigrants selected for their ability to participate in the labour market and to establish themselves economically in Canada. Skilled workers are assessed on the basis of selection criteria that stress, for example, education, language ability, and skilled work experience.

Source country: Refers to the principal country of last permanent residence. For refugee claimants, source country is the principal country of alleged persecution.

Spouse and dependants: Permanent residents who are the spouse, common-law or conjugal partner, or dependent children of the principal applicant and listed as such on the application.

Additional notes

Comparing employment earnings to Canadian average employment earnings

Average entry employment earnings are often used as an indication of immigrant economic performance. However there are some important caveats to note when comparing immigrant entry earnings to the Canadian average in the analysis.Footnote 9 The same caveat applies to the provincial analyses.

  1. The average age of recent immigrants (those who landed less than five years ago) is significantly lower than the Canadian population (31 years for recent immigrants compared to 36 years for the Canadian-born population). Age is positively correlated with employment earnings, and when age is not controlled for, one would expect immigrants to have lower employment earnings during initial entry into the labour market.
  2. Job tenure and Canadian labour market experience are important factors related to age and time spent in Canada and these factors play a role in employment earnings. Given that recent immigrants are new to the Canadian labour market, one would expect less job tenure and Canadian labour market experience as compared to the entire Canadian tax filing population. This may play a role in the differences in employment earnings and entry employment earnings between recent immigrants and all Canadians.
  3. Given the demographic picture in Canada, an increasing share of the population is nearing the peak earning years of their careers and this is placing upward pressure on the Canadian average. As a result, the gap between immigrant average entry employment earnings and the Canadian average is increasing in many instances.
  4. While recent immigrants are younger, have less job tenure and domestic labour market experience, it also should be noted that on average, recent immigrants have higher levels of education as compared to the Canadian-born population.

Variation in average employment earnings

It is important to note that entry employment earnings and growth in subsequent years are dependent on a number of factors. The socio-economic characteristics (age, gender, category of immigration, official language knowledge, education, etc.) of immigrants may differ significantly from one cohort to another and this affects their employment earnings profile.

In addition, fluctuations in the business cycle have varying impacts on new and established labour market participants. Immigrants who landed during difficult economic times typically have lower growth in subsequent yearly employment earnings as compared to immigrants who arrived when the economy was performing well.

Consequently, the number of years it takes immigrants to catch up to the average Canadian or provincial employment earnings varies by cohort. Data from the IMDB indicates that cohorts who arrived in the early 1980s reached and surpassed the Canadian average within 16 years while cohorts who arrived in the 1990s had not yet reached the Canadian average, 16 years after landing. However, as this report indicates, some immigrant classes reach the Canadian average faster than others and it is important to distinguish between instances where certain groups of immigrants reach the Canadian average and the average of all immigrant categories.

Capture rate

The capture rate is a calculation of what proportion of immigrants are included in the IMDB. This calculation is most informative when performed for various categories or cohorts. As indicated in the description of the IMDB, immigrants are only in the IMDB for their first 16 years if they file an income tax return. The table below shows how the capture rate varies by immigration category for the 2008 tax year for landing years 1992-2008.

Table 14: Capture rates by category and years since landing for tax year 2008

Class 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Family Class 60% 68% 67% 68% 68% 68% 66% 64% 65% 64% 62% 63% 60% 59% 59% 59%
SWPA 61% 78% 69% 73% 75% 74% 72% 72% 70% 66% 64% 58% 53% 53% 54% 48%
PNPA 76% 80% 77% 83% 84% 85% 79% 85% 88% 86% N/A 87% 91% N/A N/A N/A
Economic S&D 32% 40% 41% 45% 48% 48% 49% 51% 52% 52% 53% 50% 48% 50% 49% 50%
Refugees 47% 69% 50% 61% 64% 65% 65% 66% 67% 68% 66% 69% 69% 70% 70% 66%
All Immigrants 50% 61% 56% 60% 63% 63% 62% 62% 62% 62% 61% 59% 57% 58% 57% 62%

SWPAs and PNPAs typically have substantially higher capture rates than other classes although with time, the rates change, particularly for SWPAs whose capture rates peak four years after landing and decline thereafter. Other classes, for example refugees, have generally rising capture rates, such that after nine years in Canada, refugees have higher capture rates than SWPAs. More research on the IMDB and immigration patterns is required to explain these trends.

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