Measuring immigration policy change impacts

A change to Canadian immigration policies to assess applicants’ foreign education credentials as part of entry through the Federal Skilled Workers Program (FSWP) is having an overall positive impact on migrants’ labour market outcomes such as employment rates and earnings, but there is still an opportunity to improve the effects. 

Toronto Metropolitan University (TMU) business professor Rupa Banerjee, the Canada Research Chair in Economic Inclusion, Employment and Entrepreneurship of Canada’s Immigrants, studied the effects of this policy change in a collaborative research effort with the federal agency Statistics Canada. Professor Banerjee and her co-authors—Feng Hou, a senior researcher with Statistics Canada, professor Jeffrey Reitz from the University of Toronto and professor Tingting Zhang of the University of Illinois at Urbana-Champaign—published their findings in the journal Canadian Public Policy. 

The Educational Credential Assessment (ECA) was introduced in 2013 and continues to be part of the entry requirements for skilled workers applying through the FSWP. By paying a fee, the applicants have their credentials from other countries assessed and compared to Canadian standards. This information is used as part of the screening process for skilled workers. The researchers combined their expertise to examine the impact of the ECA through 2017 via Statistics Canada’s Longitudinal Immigration Database. 

Early labour market outcomes showed positive improvements for workers applying through the skilled workers program after the introduction of the educational assessment requirements. In particular, the research team found that it had a “powerful effect” for those who were completely new to Canada’s labour market, especially on income levels. The results indicated good impacts for men and women, showing small improvements in employment rates compared to non-federal skilled worker program migrants. In terms of income, they found that pay for men increased about 26.1 per cent over comparable non-skilled entry immigrants’ wages, while for women, earnings grew about 20.7 per cent in relation to their counterparts outside the program. 

Professor Banerjee notes that while largely a positive policy story, the researchers’ results show that immigrants from the United States or Western Europe still experienced more favourable labour market conditions. “Having the ECA in place seems to benefit immigrants as a whole, but it doesn’t help out those who are the most disadvantaged,” said professor Banerjee. The statistical analysis also showed that the growth in wages mainly impacted those with no prior Canadian experience. 

The positive impacts brought about by changes to Canada’s immigration policy, including the addition of the Educational Credential Assessment requirement, could be furthered through awareness initiatives, professor Banerjee noted. The statistical research and interviews they conducted suggest that after an immigrant is accepted into Canada, job seekers and employers are not often using the data from the assessments. “Our recommendation is that this could be leveraged even further than it is being leveraged once it comes to the labour market. Employers need further education on what the ECA is, what it means, so they can actually utilize this in their human resource processes and evaluations.” The interviews showed how prospective employees could also be doing more to highlight the results of their credential assessments, said professor Banerjee. She expects to continue studying the long-term effects of the ECA when more data is available. 

Having the ECA in place seems to benefit immigrants as a whole, but it doesn’t help out those who are the most disadvantaged. 

Learn more about the Canadian Public Policy journal article, “Evaluating foreign skills: Effects of credential assessment on skilled immigrants’ labour market performance in Canada (external link, opens in new window) ”.

This research was supported by the Social Sciences and Humanities Research Council of Canada. Professor Banerjee’s research is also supported by the Canada Research Chairs program.