Immigrants turning away from traditional jobs

More and more recent immigrants are opting to go the self-employed route

Many recent immigrants to Canada aren’t pounding the pavement handing out resumes in a search for a “traditional” job. They’re going into business for themselves in increasing numbers, according to Statistics Canada.

The self-employment rate rose throughout the 1980s and the 1990s. This was the case for both Canadian-born workers and recent immigrants, but it was especially true for recent immigrant workers.

In 1981, about eight per cent of recent immigrant workers were self-employed. By 1996, this proportion had almost doubled to 14 per cent. In contrast, the proportion of self-employed Canadian-born workers remained fairly steady over the same period. In 1981, about 13 per cent were self-employed, compared with about 14 per cent in 1996.

Statistics Canada said the characteristics of recent immigrants changed significantly over this period. But the self-employment rate rose much faster among recent immigrant workers than among Canadian-born workers even after accounting for differences in education, age, family composition, visible minority status and geography.

East Asian immigrants

Almost half of the immigrants in 1996 who are self-employed came from East Asia (which Statistics Canada defines as China, Hong Kong, Japan, North Korea, South Korea, Macau, Mongolia and Taiwan), up from one in four in 1986.

Statistics Canada cited two reasons for the increase: an increase in the proportion of recent immigrants from East Asia and an increase in the likelihood that recent East Asian immigrants would choose self-employment.

In 1986, about 16 per cent of recent East Asian immigrants were self-employed, compared with 27 per cent in 1996.

Self-employed in consumer services

Throughout the 1980s and 1990s, almost one in three self-employed recent immigrants were in consumer services. By comparison, only about one in four self-employed Canadian-born workers were in consumer services.

During this same period, self-employed recent immigrants became more likely to work in business and distributive services. In 1981, for example, one in five self-employed recent immigrants worked in business and distributive services, compared with one in three in 1996.

Earnings gap

The earning gap between recent immigrant and Canadian self-employed workers, though existent, did not increase between 1980 and 1995. But the gap between recent immigrant employees fell further behind the earnings of Canadian-born employees in the same time period.

For example, self-employed recent immigrants earned about $18,900 on average in 1985, compared with $25,900 for Canadian-born self-employed workers, a 27 per cent difference. In 1995, self-employed recent immigrants earned about $16,500 on average, compared with $23,000 for Canadian-born self-employed workers, a 28 per cent difference.

In paid jobs, recent immigrants earned about $19,400 in 1985, compared with $26,500 among Canadian-born workers, a 27 per cent difference. In 1995, recent immigrant employees earned about $16,600 on average, compared with $26,600 among Canadian-born employees, a 38 per cent difference.

These earnings gaps between recent immigrants and Canadian-born workers held after accounting for differences in education, age, family composition, visible minority status and geography.

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