A study on the discrepancies between immigrants working in the regular and the ethnic enclave sectors in the Canadian Labor market

ABSTRACT

This paper studies performance differences between immigrants working in the regular Canadian labour market and those in the ethnic enclave sector of the economy. First, by studying the effects of education and race on the weekly wage earnings, I find that the returns to education are greater and being a visible minority carries less of a wage penalty for immigrants working in the regular sector compared with those in the enclave sector. Moreover, taking the AMEs (Average Marginal Effects) studies, I document different effects of education and race on both earnings and job segment for these two types of immigrants and propose an explanation. After this, I compute task supply and wage gaps between different types of immigrants in three census years to show differences in assimilation by immigration cohort. Finally, I use regression models to study immigrants’ task supply and weekly wages so that we can have a fuller view of the differences in performance between immigrants working in the regular and enclave sectors. I also use these models to analyse differences between immigrants and natives in Canada.

KEYWORDS:

• Labour market segmentation
• task specialization
• immigration
• ethnic enclave sector

JEL CLASSIFICATION:

• J15
• J82

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ The value 1 means the aptitude for this occupation is the highest 10% among all the working population. The value 2 means the upper third, exclusive of the highest 10%. The value 3 means the middle third. The value 4 means the lowest third, exclusive of the lowest 10%. The value 5 means the lowest 10%.

² Here, the second-generation immigrants are defined as those born inside Canada with at least one parent born outside Canada.

³ This regress expression will be: $T_{it}^j={\gamma }_0+{\gamma }_{1}ag{e}_{it}+{\gamma }_{2}ag{e}_{it}^2+{\gamma }_{3}ag{e}_{it}^3+{\sum }_l{\eta }_{l}ed{u}_{it}^l+{\sum }_l\left({\delta }_{l,1}ag{e}_{it}\ast ed{u}_{it}^l+{\delta }_{l,2}ag{e}_{it}^2\ast ed{u}_{it}^l+{\delta }_{l,3}ag{e}_{it}^3\ast ed{u}_{it}^l\right)+{\mu }_{it}$.

⁴ Here, I will consider three cohorts in which the immigration period of the immigrants is 1971–1980, 1981–1990, or 1991–2000.