Immigrant job search assimilation in Canada

Abstract

Immigrant assimilation is a major issue in many countries. While most of the literature studies assimilation through a human capital framework, we examine the role of job search assimilation. To do so, we estimate an equilibrium search model of immigrants operating in the same labor market as natives, where newly arrived immigrants have lower job offer arrival rates than natives but can acquire the same arrival rates according to a stochastic process. Using Canadian panel data, we find substantial differences in job offer arrival and destruction rates between natives and immigrants that are able to account for three fifths of the observed earnings gap. The estimates imply that immigrants take, on average, 13 years to acquire the native search parameters. The job search assimilation process generates 18% earnings growth for immigrants in a 40 year period following migration