The challenges immigrants face in finding jobs have to do with not just the characteristics and skills they bring to the labour market, but also the state of our economy and the barriers put in their way. More and more tinkering with the selection rules used to admit immigrants will not on its own address these challenges.
In a post on my blog I called for lower rates of immigration during business cycle downturns, and a reader commented by saying:
I arrived in Canada in July 2011 with my family and was called for exactly one job interview a couple of weeks ago. To say I am scarred is putting it mildly. I left a very successful career with the knowledge that it will be difficult to get a similar position but I never anticipated that I would end up feeling invisible and a non-entity with absolutely nothing to offer. Since coming here I have been shelling out money for everything, university fees for my kids and so on. Other than contributing to the Canadian economy through our expenses, I feel immigrants are not considered to be of any particular value.
It struck me how odd and incomplete the public policy response by Canadian opinion makers and governments is to this kind of concern.
On February 8th 2012, The Globe and Mail published an editorial on the challenges that immigrants face: it was called “Canada’s immigration selection model should focus on long-term labour market needs“.
The editorial writers cited a recently published study by one of the big banks to call for the government to once again change the selection rules so that policy give more weight to applicants who can speak English or French.
This approach to public policy—the suggestion that the problem lies with the characteristics of immigrants—cannot be the whole story. To a labour economist this sounds like a labour supply explanation, and misses the opportunity to examine the structures and characteristics of the system in which immigrants are placed: that is, to also recognize the role of labour demand.
By not adjusting the number of immigrants the country lets in with a business cycle downturn immigration policy is forcing those who arrive here to paddle upstream. This needs to be a concern not just in the short-term, but also with respect to long-term labour market outcomes. Jobless spells will be longer than they need be, motivation will be challenged, and immigrants will be forced to take jobs in occupations that will imply lower wages over the long-term than they are qualified for.
But there is more to the problem than just the state of the business cycle, a case made by Philip Oreopoulos, a labour economist at the University of Toronto, in a paper called “Why do skilled immigrants struggle in the labour market?”
Oreopoulos applied to jobs in the Toronto area by sending out fictitious c.v.’s—6,000 of them— during a period in which the labour market was booming. The important point of his research is that the c.v.’s were cleverly designed and differed in particular ways. In effect he was conducing an experiment, or what he calls a “Field Experiment”.
The “control” case was a particular c.v. describing a Canadian born individual, with Canadian education, with Canadian job experience, and crucially a “Canadian” sounding name. This was sent to job vacancies he found on-line, and then a series of similar c.v.’s were sent to the same vacancies. These differed slightly: some only in that the name was changed to be a common Chinese, Indian, or Pakistani name; others in addition to having different names also listed work experience that was obtained abroad; and finally others also differed in that education credentials were obtained abroad.
Then he counted the number of call-backs for interviews received by the different types of c.v.’s.
Here is how he states his results:
The study produced four main findings: 1) Interview request rates for English-named applicants with Canadian education and experience were more than three times higher compared to resumes with Chinese, Indian, or Pakistani names with foreign education and experience (5 percent versus 16 percent), but were no different compared to foreign applicants from Britain. 2) Employers valued experience acquired in Canada much more than if acquired in a foreign country. Changing foreign resumes to include only experience from Canada raised callback rates to 11 percent. 3) Among resumes listing 4 to 6 years of Canadian experience, whether an applicant’s degree was from Canada or not, or whether the applicant obtained additional Canadian education or not had no impact on the chances for an interview request. 4) Canadian applicants that differed only by name had substantially different callback rates: Those with English-sounding names received interview requests 40 percent more often than applicants with Chinese, Indian, or Pakistani names (16 percent versus 11 percent).
The conclusion he draws is that overall “the results suggest considerable employer discrimination against applicants with ethnic names or with experience from foreign firms.”
All of this would suggest that public policy toward immigration needs not to just address supply-side concerns, and certainly the most basic way of doing that is to temporarily reduce the number of immigrants coming into the country during a major recession, but also demand-side considerations that reflect the structures and barriers in the Canadian labour market—something that would be of benefit to us all, immigrant or not.
[ The study by Philip Oreopoulos referred to in this post is published in the November 2011 issue of the American Economic Journal: Economic Policy under the title “Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes.” ]