Highly educated immigrants fare better in U.S. than Canada: study

Immigrants who are highly educated fare better in the United States in both employment and compensation compared to their counterparts in Canada, according to a new study from the Fraser Institute.

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Immigrants who are highly educated fare better in the United States in both employment and compensation compared to their counterparts in Canada, according to a new study from the Fraser Institute.

Despite Canada’s ability to attract large numbers of immigrants at the higher end of the global skill distribution, evidence from the study suggests that the U.S. “offers greater economic opportunities and rewards” than Canada.

“Highly educated immigrants make important economic contributions to the countries they emigrate to, notably through promoting innovation and entrepreneurship—which helps to explain why developed countries compete with one another to attract educated immigrants, particularly those trained in STEM (Science, Technology, Engineering and Math) fields,” said study author Jock Finlayson.

The study noted that since the Trump Administration has taken an “antagonistic policy stance” towards immigration, Canada should seize the opportunity to better compete for the “best and brightest” global citizens.

“Canada needs to implement complementary policies to improve its economic environment so that the country can capitalize on these opportunities,” it said.

Highly educated immigrants currently make 16 per cent less than native-born Canadians and have a 9.5 per cent lower employment rate.

Meanwhile, highly educated immigrants in the U.S. enjoy a slightly higher rate of employment than native born Americans—1.2 per cent higher—and earn 8 per cent more in compensation.

“Canada’s rules around granting student visas could be modified to put greater emphasis on enrolling foreign students in post-secondary programs that lead to high paying jobs—including in Canada, in the event that such students remain here following their studies,” reads the study.

“Over the last decade, the foreign education “industry” in Canada has expanded rapidly, creating benefits for educational institutions as well as the broader Canadian economy. That said, many of the international students admitted to Canada have enrolled in programs and fields that do not lead to high-paying jobs.”

The institute is skeptical that this is the best outcome for Canada and recommends that the federal government allocate a larger share of student visas “to individuals likely to obtain qualifications that will enable them to earn above-average employment incomes.”

Additionally, the study calls for Ottawa to stop granting visas to international students intending to enroll in private “degree mills” that offer lower-quality academic training.

A second policy response would be to strengthen the Canadian business environment by boosting capital investment and reducing the “current onerous tax burden on the most productive workers” to allow Canadian companies to grow.

“Increasing investment and productivity is essential if Canada is to align immigration policy with the goal of building a more prosperous country—as proxied by higher GDP and real income per capita,” it said.

“Under the Trudeau government, Canada steadily dialed up the targets for permanent immigration and progressively relaxed the rules governing the admission of ‘temporary’ migrants, which led, by 2022 to 2024, to unprecedented in-migration.”

However, because the federal government didn’t properly address Canada’s serious shortfall in investment relative to the US between 2016 and 2024, the country continued to face “chronically weak productivity growth.”

The researchers argued that this resulted in Canada lacking the ability to make effective use of the large numbers of newcomers that arrived throughout the 2010s and in the years following the 2020 COVID-19 pandemic.

“The evidence suggests that the U.S. offers greater opportunities and rewards than Canada, and therefore is better positioned to attract the most productive highly educated and skilled immigrants,” said co-author of the study Steve Globerman.

“For Canada to more successfully compete for the ‘best and brightest’ global talent, policies to improve immigrant selection and to create a more dynamic and productive Canadian economy will be necessary.”