Literacy and numeracy skills in the education and labour market outcomes or refugees and their children

Project Researchers

Richard Mueller
Project Lead

Professor and Chair, Department of Economics at University of Lethbridge

Project Description

This project looks at refugees in comparison to other immigrant classes, with a focus on those who arrived as children. We examine the following questions:

  1. The impact of age at immigration on cognitive skills (literacy and numeracy) of refugees and other immigrant classes, and how migrating at young age helps immigrants’ educational outcomes and integration into the Canadian labour market,
  2. The evolution of skills of refugees over time, and
  3. The earnings premium to these skills in the Canadian labour market.

Sweetman and Truong (2017) document that Canada admitted an average of approximately 29,000 refugees annually from 1990 to 2015, equivalent to 12% of the annual immigrant flow. Refugees tend to have lower educational attainment than their counterparts from other immigration classes and those born in Canada (Sweetman and Warman 2013; Truong and Sweetman 2017). This lower educational attainment is then reflected in their lower earnings compared to the other groups, although this gap narrows over time (Aydemir 2011; Sweetman and Warman 2013).

Schaafsma and Sweetman (2001) argue that age at immigration matters when determining the labour market premium to education. Immigrants who arrive at young ages are largely educated in Canada and are familiar with the Canadian labour market, both of which lead to better labour market performance compared to older immigrants.  Hou and Bonikowski (2016) show that children of refugees and family reunification category parents have lower test scores than skilled workers and business immigrants. Our project extends this literature by looking at the impact of age at immigration on the literacy and numeracy skills of refugees and their children. These test scores are not available in datasets used in other studies. It is important to examine if the admission class matters in determining differences in adulthood cognitive skills between groups of immigrants, and between immigrants and the Canadian-born.

Also of relevance is the recent literature studying different generations of immigrants (e.g., see Sweetman and van Ours (2015) for a summary of this literature). Another related literature studies the impact of cognitive skills on earnings gaps between immigrants and Canadian-born individuals, finding that literacy, numeracy, and problem-solving skills have positive impacts on earnings (Green and Riddell, 2013; Hanushek et al., 2015; Truong and Sweetman 2017). Childs, Finnie, and Mueller (2017) find that children of immigrants integrate very well into the Canadian education system. Truong and Sweetman (2017) show that young immigrants who arrived in Canada prior to age 13 have comparable basic ICT skills to second- and third-generation Canadians.

This project also contributes to the existing literature by looking at the evolution of the skills of immigrants compared to that of Canadian-born individuals. Specifically, it addresses how age at immigration affects the skills evolution and differences in skills among immigration classes. It studies the impact of these differences in adult skills on earnings gaps between the different immigrant classes and the Canadian-born. Finally, it determines if these metrics have changed over time.

This research informs policymakers about the integration of different immigrant classes with an emphasis on those admitted as refugees. The results will guide policy related to the types of timing of interventions to better assist refugees and their children to perform well in the Canadian education system and, subsequently, in the labour market.

Project Findings

We explore differences in literacy and numeracy skills, and the economic returns to these skills for immigrants to Canada in different admission classes, compared to their Canadian-born counterparts. Respondents are categorized into nine subpopulations: adult economic immigrants, adult refugees, adult family reunification, other adult immigrants, adult temporary residents, young refugees, young non-refugee immigrants, and second-and third-generation Canadians. With some exceptions, the results suggest that both adult and young immigrants (those who arrived in Canada at age 13 or younger) do not perform as well on literacy and numeracy tests as those born in Canada, although young immigrants have higher test scores than adult immigrants. Similar results are found for wages, our metric for success in the labour market. Generally, we find that economic immigrants tend to have the highest test scores and hourly wages, with refugees having the lowest, amongst all immigration categories. A one-standard deviation increase in literacy attracts a wage premium of eight percent for men and nine percent for women. Those of numeracy scores are associated with 10 percent wage premium for both males and females. Though literacy and numeracy tests in PIAAC 2012 are used to capture basic everyday life and workplace proficiency, the returns to these basic skills are economically significant across different ranges of the wage distribution.