New Canadians Working amid a New Normal: Recent Immigrant Wage Penalties in Canada during the COVID-19 Pandemic

Abstract

The global coronavirus disease 2019 (COVID-19) pandemic has exposed and arguably intensified many existing inequalities. This analysis explores the relationship between recent immigrant earnings and the pandemic. Specifically, we attempt to empirically answer the question “Has the COVID-19 pandemic exacerbated (or mitigated) recent immigrant–non-immigrant employment and wage gaps?” We find that the pandemic did not change the labour force activity profile of recent or long-term immigrants. Moreover, the pandemic did not disproportionately disadvantage recent immigrants’ earnings. In fact, recent immigrant men who were employed during the COVID-19 crisis experienced a small but statistically significant earnings premium. This was insufficient, however, to overcome the overall earnings discount associated with being a recent immigrant. In addition, we find that the recent immigrant COVID-19 earnings boost is observable only at and below the median of the earnings distribution. We also use Heckman selection correction to attempt to adjust for unobserved sample selection into employment during the pandemic. The fact that COVID-19 has not worsened recent immigrant earnings gaps should not overshadow the large, recent immigrant earnings disparities that existed before the pandemic and continue to exist regardless of the COVID-19 crisis.