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How apprenticeships could close the immigrant wage gap

The wage gap between Canadians and recent immigrants with university degrees has gaped wider over the past two decades, according to the last census.

SHAUN BEST/Shaun Best/Reuters

We all know the story line. Canada needs immigrants as a chief source of labour growth in the coming years as the birth rate slows. Immigrants drive innovation -- an area where Canada is woefully lagging -- and can help diversify trade.

Yet far too many skilled newcomers wind up driving cabs and cleaning floors because their foreign credentials aren't recognized.

Now, a study to be published at the end of this month has figured out one way of closing the income gap between immigrants and Canadians: encourage apprenticeships.

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First-generation male immigrants who have done an apprenticeship earn, on average, nearly 20 per cent more per week than those immigrants with just a high-school education, according to a paper by Ted McDonald at the University of New Brunswick and Christopher Worswick of Carleton University. The boost also holds for second-generation males, who typically earn more than 15 per cent per week over those with just high school.

Yet apprenticeships aren't yet common among newcomers. "Despite the significant earnings and employment advantage of having an apprenticeship, the study found that immigrants from more recent arrival cohorts have especially low rates of having an apprenticeship credential when compared to either their counterparts from earlier arrival cohorts or Canadian-born individuals," the authors said.

The drop in the supply of immigrants who have apprenticeships might be because of the shift in the composition of immigrants arriving in Canada -- away from traditional source countries in Western Europe towards new source countries like those in Asia, the researchers said.

Immigrants are falling behind. The wage gap between Canadians and recent immigrants with university degrees has widened over the past two decades, according to the last census. And as of 2008, immigrants earned $2.28 per hour less, or a difference of 9.6 per cent, than their Canadian-born counterparts despite having generally higher levels of education, Statistics Canada has found.

Governments should do more to encourage apprenticeships, or select immigrants who have had vocational training, the researchers said. "Given the strong labour market returns to apprenticeship training (particularly for men), the declining numbers of workers holding an apprenticeship in Canada raises the question about whether enough emphasis is currently being placed on apprenticeships and other vocational training in the selection of immigrants," the analysis said.

Their paper will be published at the end of February in the monthly edition published by the Canadian Labour Market and Skills Researcher Network.

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About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More

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