A new study indicates that graduates who choose to study and work in Canada earn more after graduation if they have a greater understanding of the labour market of their chosen field of study, have a stronger language proficiency, and develop contacts in the workforce.

The study — titled ‘International students, immigration and earnings growth: the effect of a pre-immigration host-country university education’ — was conducted to determine the reasoning behind the wage gap between Canadian-educated immigrants (or international students), Canadian-born population, and foreign-educated immigrants. The study reveals the importance of the market value of Canadian work and education experience in the earning potential of international students in Canada.

The authors, Feng Hou and Yuqian Lu, compared two groups:

• A 1991 group, which included Canadian‑born population aged 25 to 34 in 1991 (the census year), foreign-educated immigrants who arrived in Canada and were aged 25 to 34 in 1991, and Canadian-educated immigrants who became landed immigrants from 1990 to 1992 and were aged 25 to 34 in the year of landing.
• A 2006 group, which included the Canadian‑born population aged 25 to 34 in 2006, foreign-educated immigrants who arrived in Canada and were aged 25 to 34 in 2006, and Canadian-educated immigrants who became landed immigrants from 2005 to 2007 and were aged 25 to 34 in the year of landing.

The study was administered to answer two main questions:

1. Do university-educated international students earn as much as Canadian-born university graduates both in the initial years after immigration and in the long run?
2. Do Canadian-educated immigrants have a large earnings advantage over foreign-educated immigrants in both the short and long-term?

Key findings from the study:

• Canadian-educated immigrants have lower-earnings than the Canadian-born population, but higher earnings than foreign-educated immigrants.
• A key factor differentiating international students’ post-immigration earnings from the earnings of those who are Canadian-born and foreign-educated is if they had a well-paid job in Canada before becoming permanent residents.
• Some of the reasons behind the earning gap of Canadian-educated immigrants were due to the fact that they were part of a visible minority and they spent more time pursuing additional education.
• There is a significant decrease in earning gap overtime from the first year of permenant residence to 10 years after permanent residence. For example, Canadian-educated female immigrants earned on average 50 percent less than canadian-born females in the first year after becoming permanet residents, but that gap narrowed down to 20 percent after 10 years. This implies that the number of years working and a longer exposure to the labour market may have a significant impact on the earning potential.

A key factor differentiating post-immigration earnings of Canadian-educated immigrants from the Canadian-born population and foreign-educated immigrants is whether international students held a well-paid job before becoming permanent residents.

According to the study, some of the reasons why international students are at a disadvantage of gaining a well-paid job or developing Canadian work history are the following:

• International students often pursue education beyond the bachelor’s level, which results in fewer years in the workforce.
• Some international students begin their Canadian education at an older age and take longer to complete their studies.
• Some might find it difficult to find a good job after graduation due to lack of social networking and language abilities.

The study demonstrates that it is necessary to understand the underlying factors that constrain international students from getting high-paying jobs after completing a Canadian education.

Finally, what matters for international students is not the number of years of Canadian work or study experience, but their pre-landing earning potential in Canada, as it is indicates the market value of their education or work in Canada.

This study further proves the importance of career transitioning programs, such as the Study and Stay Nova Scotia programs, which are aimed at supporting international students and graduates  overcome barriers as they engage with the labour market.

If you want to discover your options for studying in Canada, complete the free CanadaVisa Study Pathway Assessment Form today.

With The CanadaVisa Study Hub, international students and graduates have a chance to win a $500 scholarship. Members also get access to exclusive notifications, tools and resources to help maximize their time in Canada and pursue a pathway to permanent residence.

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