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The earnings gap between recent immigrants and Canadian-born workers was larger among individuals with a university degree than among their less educated counterparts.
In 2005, recent immigrant men with a university degree earned only 48 cents for each dollar received by Canadian-born male university graduates. In contrast, recent immigrant men with no university degree earned 61 cents for each dollar received by their Canadian-born counterparts. Similar patterns were observed among recent immigrant women.
The larger earnings disparities among university graduates were observed as many recent immigrants with a university degree were employed in low-skilled occupations.
For instance, 29.8% of recent immigrant male university graduates worked in occupations normally requiring no more than high-school education in 2005. This was more than twice the rate of 11.5% among their Canadian-born counterparts.
Similarly, recent immigrant women with a university degree were more likely to work in low-skilled occupations than their Canadian-born counterparts.1
This high propensity of recent immigrant university graduates to be employed in low-skilled occupations partly explains why the relative return to a university degree was smaller among recent immigrants than among Canadian-born workers.
In 2005, median earnings of recent immigrant male university graduates aged 25 to 54 were 24.0% higher than those of their counterparts with no university degree. The corresponding proportion among Canadian-born individuals was 55.5%, more than twice as high.
As a result, recent immigrant university graduates had lower median earnings than Canadian-born individuals of comparable age with no university degree. For instance, recent immigrant men with degrees had median earnings of $30,332, about 24.6% below the level of Canadian-born men without university degrees.